I don’t see the contradiction. The government creates the tax code with at least the stated intention of encouraging or subsidizing certain behaviours over others. That only works if people respond rationally to the incentives.
From the individual rationalist’s point of view one should aim to optimize one’s resources. In the context of taxes that generally means arranging your financial affairs to minimize the taxes paid without breaking the law. You can then choose how to best meet your own goals by allocating the money you save as you see fit.
It is only rational to not avoid taxes if you either believe the effort required to avoid them is not worth the money saved or if you believe that the optimal use of the money is to give it to the government. It seems unlikely in the latter case that the optimal amount to give to the government just happens to be the very amount they take from you so you should probably be voluntarily donating a larger portion of your income to the government. If you live in the US you should go here.
In the context of taxes that generally means arranging your financial affairs to minimize the taxes paid without breaking the law.
Since we were talking about choice of career among other things, it’s worth stating that your actual incentive here more closely resembles “maximizing your after-tax income” than “minimizing your taxes paid”.
True, I was focusing slightly more narrowly on the idea of minimizing your tax burden at your current income level without making major changes in your career, country of residence, etc. but on a longer timescale or in the context of broader life goals you are aiming to maximize your after-tax income rather than minimize the taxes you pay.
I don’t see the contradiction. The government creates the tax code with at least the stated intention of encouraging or subsidizing certain behaviours over others. That only works if people respond rationally to the incentives.
From the individual rationalist’s point of view one should aim to optimize one’s resources. In the context of taxes that generally means arranging your financial affairs to minimize the taxes paid without breaking the law. You can then choose how to best meet your own goals by allocating the money you save as you see fit.
It is only rational to not avoid taxes if you either believe the effort required to avoid them is not worth the money saved or if you believe that the optimal use of the money is to give it to the government. It seems unlikely in the latter case that the optimal amount to give to the government just happens to be the very amount they take from you so you should probably be voluntarily donating a larger portion of your income to the government. If you live in the US you should go here.
Since we were talking about choice of career among other things, it’s worth stating that your actual incentive here more closely resembles “maximizing your after-tax income” than “minimizing your taxes paid”.
True, I was focusing slightly more narrowly on the idea of minimizing your tax burden at your current income level without making major changes in your career, country of residence, etc. but on a longer timescale or in the context of broader life goals you are aiming to maximize your after-tax income rather than minimize the taxes you pay.