The Right Not to Overpay: Fiscal Self-Sovereignty and the Lawful Non-Creation of Taxable Facts

Elias Rubenstein

doi:10.36948/ijfmr.2026.v08i03.81409

The Right Not to Overpay: Fiscal Self-Sovereignty and the Lawful Non-Creation of Taxable Facts

Author(s)	Dr. Elias Rubenstein
Country	United States
Abstract	This paper develops the concept of fiscal self-sovereignty as a legal, moral, and economic framework for lawful tax planning and legal tax saving. It argues that citizens, entrepreneurs, investors, self-employed professionals, corporations, and multinational groups are obligated to pay taxes that are lawfully due, but they are not obligated to organize their residence, work, ownership, investment, liquidity, corporate structure, intellectual property, financing, or cross-border operations in the most tax-expensive manner available. The duty to comply with tax law does not imply a duty to overpay, remain maximally taxable, trigger unnecessary taxable events, preserve unnecessary fiscal attachment, or choose inefficient legal forms merely because they produce higher revenue for the state. The central research question is whether the legal duty to pay taxes that arise implies a legal or moral duty to arrange one’s affairs so that more taxes arise. This paper answers in the negative. Taxpayers must comply with the law, but they are not required to create taxable facts unnecessarily. The non-creation of tax is not the same as non-compliance. This distinction holds where the taxpayer acts within applicable reporting, disclosure, substance, anti-deferral, and anti-abuse rules. Where no taxable event has legally arisen under those conditions, there is no tax to evade. The paper uses a conceptual legal-theoretical method. It does not offer jurisdiction-specific tax advice, and the examples discussed are illustrative rather than prescriptive. The paper identifies recurring mechanisms through which tax obligations arise: nexus, residence, source, classification, ownership, timing, realization, distribution, remittance, entity form, treaty qualification, financing structure, value attribution, anti-abuse recharacterization, and coordinated minimum-tax rules. It then develops a general theory of lawful tax saving as the intelligent non-creation, reduction, or deferral of unnecessary taxable facts within legally recognized boundaries. The paper makes three contributions. First, it distinguishes tax non-compliance from the lawful non-creation of taxable facts. Second, it develops fiscal self-sovereignty as a normative framework for lawful tax saving. Third, it shows that personal, entrepreneurial, and corporate tax planning share the same underlying mechanisms: nexus, classification, timing, ownership, financing, jurisdiction, substance, and anti-abuse boundaries. The conclusion is that the taxpayer is a legal subject, not a fiscal object. The state’s legal claim extends to taxes that valid law creates; it does not extend to a taxpayer’s failure to choose more efficient lawful arrangements.
Keywords	Fiscal self-sovereignty, lawful tax planning, legal tax saving, tax compliance, tax nexus, tax residence, worldwide income taxation, exit taxation, tax morale, corporate tax planning, transfer pricing, debt-based liquidity, tax competition, taxable events, legal classification, legal form, tax incentives, tax incidence, capital formation, GAAR, Pillar Two
Field	Sociology > Administration / Law / Management
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-06-14
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.81409

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The Right Not to Overpay: Fiscal Self-Sovereignty and the Lawful Non-Creation of Taxable Facts

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