Posted on 04/11/2010 7:46:58 PM PDT by 2ndDivisionVet
He plies his trade at Arden and Howe, one of the city's busiest corners. An advertising sign holder for hire, Trandell McCauley makes his money a couple hours a day or a week at a time.
And he earns it in cash.
McCauley calls his job a "backbone," the $10 an hour he earns keeping him standing in tough times.
He is part of the bustling underground economy, where folks are paid in cash and taxes aren't paid at all. State agencies don't keep precise, up-to-date statistics, but experts say the deep recession has made such shadow work a growth industry here.
Some of these people can't find other jobs; some choose to avoid paying taxes; some are undocumented immigrants who fear deportation. Others have employers who insist on hiring them under the table. Still others earn income through illegal activity.
As much as $2 trillion in income went unreported nationally in 2008 — about 24 percent of total adjusted gross income in the United States, said Edgar Feige, a University of Wisconsin economist and authority on the topic. That's the highest level since World War II, he said.
"It seems to be trending up," Feige said. "There's no indication of it changing course until the general economic situation improves. When more employment opportunities arise, that will reduce the level of underreporting and nonreporting."
For the cash-strapped state of California, the underground economy represents a major lost opportunity to help fill the estimated $18.6 billion budget deficit.
In 2005, the state Legislative Analyst's Office estimated the state was failing to collect about $6.5 billion in income taxes each year due to such cash transactions. Another $1.5 billion annually in sales taxes was also going unpaid, the agency estimated.(continued)
(Excerpt) Read more at mercurynews.com ...
Craigslist. No taxes on private sales, new or used stuff.
We need to raise taxes and welfare benefits so as to stop this.
So then, If we dump the IRS (save billions) and put in the FAIR TAX - WAshington will have just as much if not more money to do it's business with - but would have to do it's business with it's Gestapo arm, aka IRS.<
Everyone would be paying taxes - not just that WORK - because the FAIR TAX is a consumer tax...like the state sales tax.
You decide how much you pay in taxes by how much you spend. the REALLY Fair part of FAIR tax is that you get compensated for the tax on up to @ the first $20,000 a year for basic living costs. After that, you start paying the tax - but if you buy, say, a second hand car - NO tax. No tax on anything second hand. (furniture, cars, houses, etc.) There are no loopholes for the super wealthy to crawl through - they'll pay their FAIR tax.
The SWEET part is that the illegals and the drug czars will pay from dollar one, because the won't get the tax compensation for basic living expenses.
No more IRS, no more filing tax returns, no more reporting how much you make or where you work, etc. FREEDOM.
And the Socialist/Marxists would be done for.
OH - and every single cent you make will be in your pay check. Not one dime taken out, How FAIR is that?
http://online.wsj.com/article/SB119863013677849835.html?mod=opinion_main_commentaries
bookmark and read - FAIR TAX = FREEDOM
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When taxes become crippling to workers, workers find ways around taxes.
Seems to follow that, if you want to stimulate the economy, maybe you should lower taxes.
That’s how “private” healthcare willl be funded once long waiting lines happen
By what logic? What makes you think the government should claim part of somebody's money just because you disagree what their use of it?
Few people recognize the obvious parallel between the underground economy and the Laffer curve.
When income and capital gains taxes are raised beyond a certain point on those with employment and investment income, they will as a matter of course, shift their investments and income away into lower tax brackets. This shift is so great that higher taxes can actually result in lower revenues.
But conversely, when the power of government shifts against the less wealthy, making it harder for them to work legally, requiring identity checks and lots of paperwork, and demanding too much out of their small pay, the less wealthy will just do a variation of what the rich do: shield their income.
If this means working in the “underground” economy, and to heck with government, so be it, as far as they are concerned. But until they can convince those with some money to be their underground benefactors, times will be somewhat harder.
The trick here is for small businesses to pay their underground employees “off site”, to keep the transaction as invisible as possible.
Of course, the more onerous and intrusive the government becomes, the easier it is to write them out of the equation entirely.
For example, ignoring illegal aliens for a moment, there are plenty of Mexican-American citizens, who often travel to Mexico to visit relatives. While there, they can do a brisk distribution business, bringing back all kinds of products that are hard to get in the US.
Such as high capacity toilets, and soon, 100W incandescent light bulbs (as of Jan 1, 2012), name brand pharmaceuticals at much lower cost, Cuban cigars, etc., etc.
This is because people will pay the extra dollars both to get the products they want, not just what the government wants them to have, and to anonymously tell the government to go get knotted.
Sure, it’s part of the underground economy, but in this case, it is a good thing.
I wouldn’t be surprised if 0bama takes you up on that one. As taxes go up on individuals and we see more taxes and regulation on corporations and business, we will really have capital flight before that type of regulation is enacted. The amount of money sent home by illegals will be a pittance compared to the amount of capital that will flow out of the US and the capital that does not get invested in the US.
If things get really bad here, a lot of retirees are going to go to places like Costa Rica, and the Islands for the climate-the economic climate that is. Let’s hope that we don’t get an economic Berlin Wall.
Hey Captain, I’ll need your boat to take my stash out of the country.
(what their use of it) should be (with their use of it)
It already exists to some extent.
I don't know what it paid but in my opinion, one of the worse jobs imaginable, my oldest son once worked in the offal room at Tyson Foods, wading in chicken guts 8 hours a day.
$10/hour with no taxes, subsidized rent, food stamps and free medical care from CA, and one can live a fairly good life if your standards aren’t to high. A couple of single people share a place to live with both doing the same, and you’re loking at a fair good level of disposable income.
As long as they only tax the "rich".
That’s quite bad.
Or exercising free will. (Sin taxes)
More and more people will go into business themselves to get direct access to cash. For more intrepid but unsavory types, we will see more cooperative enterprises between illegal and legitimate business. The money laundering of drugs and other contraband via restaurants is always an oldie but goodie. Restaurants always under-report cash while dealers need a laundry.
Shopping at small retailers can also benefit consumers. Paying cash always seems to get a price reduction. I wonder why?
If 0bama wants us to be more like Europe, here is one way.
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