I'd try to make as much income as you can in cash as the state and federal governments intend to keep as much of your reported income as they can get away with because of the Taxpayer Act of 1943. That's the Act that gave the federal government the "right" to go into your wallet and take out as much as they "need" via payroll.
Some cold winter afternoon when you have an hour or so to spare, take a look at this. One of the very best articles ever published on that subject.
http://www.cato.org/pubs/journal/cj14n3-1.html
EVOLUTION OF FEDERAL INCOME TAX WITHHOLDING: THE MACHINERY OF INSTITUTIONAL CHANGE
Charlotte Twight
Figures from a few years back, which by now will be greater, indicate that about 10% of the US economy is already off the books, ie, cash transactions. The government knows this, as it costs them over a hundred billion a year in federal taxes, and states lose millions in sales taxes. But I expect to see more and more local merchants and service people asking to be paid in cash.