Not if my experience is any guide: that is, not if you’ve praciced “extremely rewarding income-producing investment activities” in the … oh, let’s say … 7 years leading up to your planned “extremely early retirement” date.

If you believe in payment according to means and in effecting change to support what you believe, then why not take action rather than talking about it? The most effective way for you to so effect this change is to join us: arrange (legally) to exploit every loophole you can find in the IRC. I’m neither a lawyer nor a financial professional of any sort, and I am able to easily zero out my federal income taxes at very little time cost to myself. I know of no better way to get something done than to lead by example and see who follows. How many people have to exploit the IRC before lawmakers get the picture and unscrew the code? I’d prefer them to scrap the whole gig and start over, but we’ll see what they come up with in the way of incremental changes. So, how do you wield your liberty? What actions do you take to effect change such that everyone pays according to their means? (I politely and in good faith suggest that your lecturing on morality has very little effect at all.)

I see nothing wrong with a person paying only their “fair share” of taxes. I just think we may define what is fair differently.

In a perfect utopia I’d support the Libertarian ideals to limit government and depend on individuals to always do the right thing. The problem is that in reality individuals are happy to trounce on the rights of others and ignore the common good. Schools, police, roads, libraries, etc are items that absolutely benefit the common good and it is your duty to pay for these services. The environment and defense are areas that require federal oversight as well. Even if you don’t use these services directly they provide a broad lift to our entire populous, and you benefit from the indirect affects.

There is also the issue of tyranny of the majority. What that means is that rural areas would never get phone service and electricity. Cyclists would never get bike lanes (since most people drive cars, right?). Corporations would run unchecked to discriminate, commit accounting fraud, violently put down unions, and ignore the safety of workers. OSHA, SEC, FDA, EPA, FAA, DoE, FEMA, NASA, HUD, FHA, FDIC, etc all of these agencies and organizations do good things! These responsibilities are not easily replicated by the private sector. Left unchecked the little guy would get squashed. Bureaucracy is expensive but it is sometime still the best way to do important work.

Moving to a pay for service model would certainly cause many people slip through the cracks, not to mention how it would hurt social mobility and the equality of our society. Do you want to deal with a police officer that is paid by general tax revenue or a neighborhood vigilante group? Do you want to haggle about prices before the firemen will douse the flames? Liberty is about having the power to affect change and not about making sure you don’t pay for a library you don’t personally use.

My mom taught me to share my birthday cake with all of the other kids even if they didn’t bring a present to the party

It is difficult to quantify the right amount of taxes but I have my ideas. To make it short and sweet, everyone pays according to their means (wealth AND income) but not according to the skill of their CPA or CFP.

Seriously, I don’t see the problem for those that can achieve it to take advantage of what options we give them in the US. He’s not doing anything illegal or immoral.

It does seem best that Early Retirees would use their time to do things beside serving themselves and I suspect Jacob will and is already. Someone who has the discipline & knowledge to become retired at a very early age, will go quite crazy doing nothing.

Also, I don’t remember reading anywhere that anyone is required to pay taxes when their income is low, no matter how they earn that income.

Btw…Jacob, thanks for the blog. I find it interesting and thought provoking many times. I will NOT be retiring early, since I’ve chosen to have a big brood instead. But I find inspiration to reach for my own early retirement (65?) just by reading. I don’t know yet when I’ll retire as I’m working on stupid debt instead but thanks for giving me ideas anyway.

@steve - 1) as far as I understand I can put my $4000(2007) limit in either a ROTH or a Regular IRA. Contrary to popular opinion scientists don’t make a lot of money. I make about as much as a long-haul trucker except that I also pay rent. Until recently DW worked as a grad student (they get paid even less). DW could take full deduction and I could deduct almost all of my IRA contribution. But of course, if our AGI was $103k I would go for the ROTH. 2) Yup, 1040, lines 25, 32 and 40 for an individual. 3) I think I need a W-2 income to contribute to the IRA. I’m not sure about the HSA though. The plan is to work enough to fully fund these and then live off of the investment income. 4) I saw an even better job on craigslist. Unfortunately it was in the wrong city, but the job involved leading a group of fitness (no hammering!) cyclists for a fitness ride every Saturday.

@adfecto - I guess you’re a socialist (I never would have suspected that!). What I see is how the government effectively steals my work and how it has been doing so for many years. Robbing is perhaps a better term since I would be going to jail at gun point if I refused to pay taxes. If there was an option to pay 0% taxes and then pay per use, I would take it (if I could please have the $50k+ I have paid in taxes so far back). It is not like these services would not exist (if there was a demand for them) if there were no government. The government just takes the money from productive people and gives it to less productive people. Insofar the market is efficient this is true by definition (I do support tax for externalities like pollution and defense). Well, this atlas shrugged. Actually one of the great benefits I get from being in the USA is in paying for less in tax than I would in Europe. People are economically freer in the US.

Thanks for the link to retiresyd, I’ll be grilling her with some Q’s soon. ;-\

Your paper delivery suggestion is genius! You get to bike *for* work!

You’re only going to live to your 90s? I’m gunning for triple figures! Just had my last grandparent pass away at age 99, so the trend is good. We’ll see how the parentals do en route the century mark.