No . . . having excessively-high tax rates and nanny-state regulations is what costs the economy. Lower taxes, and revenue will go up. (£2 billion = $3.4 billion ATTOW.)80% admit they pay workmen cash in hand: Failure by tradesmen to declare earnings said to cost economy £2 billion a year
Sounds like an honorable and fiscally sound tradition to me.
It may cost government extra tax revenue, but not the economy. It actually a positive
And since the Feds collect a tax on income, only honest citizens are taxed for their work.
A national sales tax or national property tax would be less easily avoided by the dishonest.
A friend from Nicaragua, here legally, keeps me informed on the underground economy. Need a plumber? A real company carrying the many state and federal imposed insurance, bonding, minimum wage, unemployment insurance, license fees etc. charges you $250 to come out, but if you hire them it gets included in the price. Then there’s the significant markup on materials and the (I think) $90/hour cost. So you may be looking at more than a mortgage payment to fix a leak. One of the things he could not get taken care of was pumping his septic tank. Because his English was poor and he can’t say the name of his street, I took the yellow pages intending to get prices from three suppliers for him. The first five in the book were out of business. They’re out of business because the drop in business caused by the Obama economy left insufficient business to carry the high fixed costs imposed by government. You can multiply this issue by almost every service you can imagine.
I’ve moved to a modest neighborhood in the woods to lower my expenditures. My neighbors are mostly making it paycheck to paycheck. Before they discovered my friend and his contacts problems from leaking roofs and plumbing and other serious issues went unaddressed or they suffered terribly on some other level to address them. The problem is not illegal aliens as some of the workers are Americans. It is the high fixed-cost burden placed on companies. Without people willing to do the work more cheaply my neighbor’s house would be progressively more damaged by unaddressed problems.
I feel for the company owner, having owned two myself. (I lost the last one entirely for government caused reasons. I could have weathered the early ‘90’s downturn by simply taking a job until the economy improved. But the cost of being registered, a requirement in my field, had jumped from $15 to $1,500.)
“With the builder or plumber failing to declare their earnings and pay any tax, such secret payments are said to cost the economy £2 billion a year.”
Only in a socialist society (US not excepted) is tax avoidance said to ‘cost’ the economy by reducing the amount of tribute rendered unto fedgov (or gov at any level).
Cut taxes and regulations. Free up the engine of commerce. Revenues go up. It’s been done, and can be done again.
So stop taking such a big chunk of the HONEST worker’s earnings!
I’ve done it and saved buckets of money, most recently on a concrete double wide 75 feet long drive way. I win, the contractor wins and the greedy corrupt government loses.
Another option is to simply LEARN how to do the work yourself, as 95% of the jobs can be done by the home/auto owner alone. Of course you need tools, but they cost next to nothing. And unlike even 10 years ago, you can cheat now, by watching Youtube for just about any repair (something I refuse to do).
Don’t forget barter. Sometimes to sweeten the deal, we let them keep any the cars they find when they mow the grass around the double wide.
The black economy might be the only thing keeping them from sinking into the ocean
How is it costing the economy anything? It’s probably helping
In Sweden there are always two prices. The black price and the white price.