I understand what it is. I just don't believe that counting it as a compliance cost is honest or realistic. There is no money which is recoverable if the IT were to disappear. You might just as well claim that TV watching costs the nation $10,000B a year.
I understand what it is. I just don't believe that counting it as a compliance cost is honest or realistic. There is no money which is recoverable if the IT were to disappear. You might just as well claim that TV watching costs the nation $10,000B a year.
Only that amount of TV watching that occurs because someone has choosen to work less because that next dollar they earn costs more than they get to keep. At that point they just slow there production as not worth the effort, or stop all together as leisure is worth more than working for the government's benefit.
I've been there, as have many. Why bother to work more with the hassle and grief that comes with it and pay government for the privilege as well. Heck with that situation, government and the economy can go wherever, I'll spend what I have now, and make the government cough up more when I retire.
Ultimately, even lower income folks are pulled into the mix. When carried to extreme you have substantial numbers of folks so disgusted by the intrusiveness of the income tax system and IRS, the finally just drop out and go to the underground cash economy (variously estimated as 15-25% as a percentage of GDP) essentially no longer a viable section of the economy. Cash on the barrelhead is a mighty hard way to make anykind of living and especially not an efficient addition to the economy as a whole.
To say that "There is no money which is recoverable if the IT were to disappear" shows you have no understanding of the motivations that drive people when government is too intrusive, taxes are too high, and tax administration pushes people right out of the door.
The term for it is deadweight. The factors that impede markets and productivity and show up in lower earnings, lower standard of living, and higher prices for severely reduced productivity.