[Remember_Salamis]

bump.

[theFIRMbss]

>Whether caused by taxes or regulations, it is clear that government is the prime cause of the underground economy

Let's eliminate
government! (Although, of course,
then the underground

economy will
become the environment
and it will create

its own underground
of cheaters and evaders.
Oops. Our faults lay not

in our stars, but in
ourselves. Taxes don't create
cheaters. Cheaters do.)

[Willie Green]

"Raising tax rates too high drives firms into the underground economy," the study concluded.

In the United States, sales and excise taxes provide the greatest incentive for the underground economy.
Proposals to establish a National Sales Tax that is 5x greater than state tax rates will drive most people into the Black Market. Organized crime will also increase warehouse and factory theft, truck hijackings and retail burglaries to supply the black market.

[gipper81]

bttt

[ancient_geezer]

Actually there are two sources of under reporting going on for income taxes.

One is the underground cash economy that doesn't show up in anyone's measurement. Generally estimated to add more than 10% beyond the NIPA/GDP measures. That works out to be more than $1 Trillion today.
NCPA - Economic Issues - The Unmeasured Underground Economy

The other is underreporting of individual income from businesses and overseas sources, that results in a GDP discrepency known as the AGI gap, accounting for another at least $800 billion as of 2001:

Bureau of Economic Analysis, Supplemental table 7.19

National Income and Product Accounts Table

Table 7.19. Comparison of Personal Income in the National Income and Product Accounts with Adjusted Gross Income as Published by the Internal Revenue Service
[Billions of dollars]

Today is: 5/13/04   Last Revised on May 7, 2004

Line		2001	2002
16	Equals: BEA-derived adjusted gross income	6,983.4	---
17	Adjusted gross income, IRS	6,170.6	---
18	Adjusted gross income (AGI) gap 2	812.8	---

[monocle]

What about the effects of illegal immigration?

[Koblenz]

I'm always sort of amazed when I ask what something will cost, and the guy says XXX plus tax, unless you pay in cash. I've had mechanics and landscapers, among others, offer these terms. Sheesh. I almost always still pay the tax, because it's only 6%, and it gives me a record of my payment so if I need warranty work or whatever. Plus I don't want to have to get $1,000 or whatever in cash.