The Underground Economy

Barron's (cover story -The Wall Street Journal Classr0oom Edition) ^ | April 2005 | Jim McTague

[pigdog]

Illegal Immigrants and Others Working Off the Books Cost the U.S. Hundreds of Billions of Dollars in Unpaid Taxes

America has two economies: First, there's the legitimate economy, in which craftsmen are licensed and employers and employees pay taxes. Then there's the fast-growing underground economy, where millions of nannies, construction workers, landscapers and others are paid off the books, their incomes largely untaxed. The best guess as to the size of the output of this shadow economy is about $970 billion, or nearly 9% that of the real economy. It could soon pass $1 trillion.

What is largely fueling the underground economy, experts say, is the nation's growing ranks of low-wage, illegal immigrants. The government puts this population at 8.5 million, but that may represent a serious undercount. Robert Justich, a senior managing director at Bear Stearns Asset Management, makes a persuasive case in a recent research report that illegal immigrants actually number 18 million to 20 million. If that's true, the economic implications are profound and could help shape this year's debates over both immigration policies and tax reform.

[pigdog]

Yeah, and they import that too when they come here illegally. Why not???