Tax Day is one week from today, which means lots of taxpayers, and accountants, are busy getting filings ready. But some residents, especially those on the political left, have been talking about maybe not paying their taxes this year as a kind of protest against the Trump administration.
These kinds of protests are not confined to the left; the Tea Party movement went through similar discussions earlier in this century.
Adam Chodorow, tax professor at ASU’s Sandra Day O’Connor College of Law, joined The Show to discuss.
Full conversation
MARK BRODIE: Adam, good morning.
ADAM CHODOROW: Good morning.
BRODIE: So let's talk a little bit about the history of this because as I mentioned, the left is not, this is not something that only the left deals with like the Tea Party is kind of predicated on not wanting to pay more taxes, right?
CHODOROW: Right. They weren't withholding their taxes, but they were protesting the taxes that existed and wanted lower taxes.
BRODIE: And what are you seeing? I mean, are you hearing rumblings of people on the left saying, yeah, maybe this year I'm not going to. Maybe I'm going to like, you know, give, give a rhetorical middle finger to the federal government this year.
CHODOROW: Yeah, actually it's more than rhetorical. It would be a true middle finger. But yes, there are some rumblings on the left about, you know, maybe the thing to do is not pay your taxes. This actually came up the last time Trump was in office in 2017. There was a lot of talk about tax protests. And it's, it's sort of bubbling up again as, as, as sort of things get chaotic.
BRODIE: OK, so you say it's, it's more than rhetorical. I mean, for one thing, it's not legal to not pay your taxes, right?
CHODOROW: Yeah. It is not legal at all, and you could be subject to both civil and criminal penalties for failing to pay your taxes.
BRODIE: Now what about the idea that, you know, which I assume that you have heard, I've read online as well. Well, you know, they're defunding the IRS like they're not going to, they're not going to even have any agents to come after me to audit me or to ask me to pay my taxes if I don't do it, right?
CHODOROW: So one of the potential traps is people thinking, well, with the IRS getting wiped out, I don't, who's gonna, who's gonna figure it out? Well, the problem is that most of us get W-2s which report our wages to the government, and 1099s which report our interest, our dividends, etc. And so the government actually has most of our information.
So if we fail to pay, there's, it's actually fully automated. So the computer just says, wait a minute, we got this 1099, you didn't report it. We're coming after you. You get an automatically generated letter saying you failed to pay your taxes.
BRODIE: Regardless of whether or not there are X number of agents still working at the IRS.
CHODOROW: That's right.
BRODIE: So you also, you wrote a piece in Slate, an online magazine about some of the other sort of like moral ethical questions about whether or not one should pay their taxes, and you made the argument that for those on the left, not paying their taxes might not have the sort of the political impact they hope it would have.
CHODOROW: Right. I mean, there's the practical question, which is if I withhold my taxes, what am I doing? I'm depriving the government of money. When you're protesting some government policy like the war in Vietnam, you know, that makes a little sense. But right now, what, what, what, what the Trump administration wants to do is cut government spending, and what better excuse can you imagine to cut government spending than the fact that, well, people haven't been paying their taxes, so we don't have the money, so we're going to have to fire more workers, cut more grants, etc. etc.
BRODIE: There's also the issue, and this is a conversation I think a lot of people have, is like, wouldn't it be nice if we could say, OK, I have to pay, let's say $100 in taxes. I want $20 to go to this, I want $20 to go to that, I want $50 to go to that. That's not how it works, right? Like you pay your taxes to the state or the federal government and they use the money the way that they want, not just going to causes or programs that we like, right?
CHODOROW: So we are a democracy, which means that the majority gets to decide what we fund. And how much we fund it at. There's one small area where you kind of can get to direct where your tax money goes, and that's charitable contributions. Functionally what you're doing when you give money to charities, you're giving your money and then the tax money that you would have paid to the charity.
But aside from that very small limitation, generally speaking, the government gets to decide and the government decides based on whoever it is elect.
BRODIE: So in that sense then, I mean one could, I would imagine also make the argument that, you know, if you don't pay your taxes, it just could mean the programs that you actually do like that the federal government does will be the ones that have to go away because they don't have the money.
CHODOROW: Exactly. It seems to me, for instance, unlikely that the Trump administration would say, look, we collected less than we expected, so what we're going to do is we're going to cut Defense, we're gonna cut the things that people on the left tend not to care about or tend to care about less or think could be made more efficient.
Instead what they're gonna say is all right, well now all foreign aid is gone to the extent it's not already gone and other programs that people on the left care about, they're gonna be gone too.
BRODIE: Do you have a sense of like how big of a contingent of, I guess this year we have to call them non-taxpayers, there might be like, do you think a lot of people are going to do this?
CHODOROW: I, I don't think so, and, and I hope not because the penalties for failing to pay your taxes are incredibly steep. There is a failure to file penalty. There's a failure to pay penalty and then interest, right? If you, it could easily end up the case that you end up more in penalties and interest than you owed in taxes.
BRODIE: Well, there's also the issue, right, that we all, many of us anyway, pay taxes every couple weeks, right? Like when we get our, our paychecks and that for a lot of people not filing means they're not getting a refund, right?
CHODOROW: Right. So one of the things that happens is that you have money withheld from your paycheck every, every time you get paid. And and often for a lot of people, they actually over-withhold. So, so if you don't file your taxes, you can't ask for that money back, and that's a real problem.
BRODIE: Do you see this as a a thing that's going to just keep continuing to happen, that people who are unhappy with the federal government, whoever's in office, or maybe even the state government, whoever's in office, to try to at least talk about withholding their taxes as a form of protest, or do you think at some point people are going to realize maybe this isn't the best way to register our unhappiness?
CHODOROW: I think that people are going to talk about it forever, right? Every time the government does something you don't like, people are going to have this instinct of, oh yeah, well then I won't pay my taxes. Do I think it's going to actually turn into a widespread movement? I doubt it because of the consequences, right? It turns out you have the right to protest, but, but you also have to suffer the consequences of protesting.
BRODIE: Fair enough.
