Posted on 01/01/2005 6:00:55 PM PST by shrinkermd
AMERICA HAS TWO ECONOMIES, and one is flourishing at the expense of the other. 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 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 should soon pass $1 trillion.
What is largely fueling the underground economy, experts say, is the nation's swelling 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 in New York, makes a persuasive case in a forthcoming paper, "The Underground Labor Force Is Rising to the Surface," that illegal immigrants actually number 18 million to 20 million. If true, the economic implications are profound and could help shape debates slated in Washington this year over both immigration policies and tax reform.
(Excerpt) Read more at online.barrons.com ...
"One thing is certain: The rest of America is subsidizing the other half's free ride, and the costs will only grow if authorities continue to underestimate the scope of the problem
Barter is a time-honored way for tradesman to do business.
Chuck the current tax system and replace it with a national sales tax. At least that way all the illegals will be paying their share.
Works for me...my first job was a $1.50 an hour under the table...
I'm confident that everyone here reports their Ebay sales to the proper taxing authorities.
Suuuuure.
Illegal immigration may be part of this, but a large number of people I know in Washington DC, who are US citizens working on national security concerns have chosen to be independent consultants rather than direct employees just for the reasons of tax advantages and paperwork burdens.
This is not an illegal immigration story. It is a tax reform story.
Furthermore, this author writes as if it would be a good thing if another $100B were taken out of the private economy and put in the hands of government officials. It isn't just an issue about fair distribution of taxes. It is also an issue of just what fraction of total GDP should be spent by the government.
STOP THINKING ABOUT ILLEGAL IMMIGRATION BEING BAD!
SUCH THOUGHTS ARE VERBOTTEN!
YOU WILL LEARN TO APPRECIATE LOWER WAGES AND HIGHER TAXES!
IT IS THE FUTURE!
GET USED TO IT!
(Message brought to you by the National Chambe of Illegal Commerce.)
on some items. but for sure, food is going to be exempt. and so is rent. would you add the national sales tax to the current gasoline tax? most of the money these workers spend goes for food, gasoline and rent.
If employing the non-Americans becomes legal, then this underground economy will go above ground.
Isn't this what the amnesty concept proposed by the current administration, would do?
We can't stop this inflow and under the table employment. We can make it so it pays it's share of taxes.
That is the only solution that makes sense.
I think the fairest tax would be a "everyone pays the same amount" tax.
I don't give a whip about it being "regressive" as I cant even find the term in the Constitution. For everyone to be equal under the law they should be taxed equally.
The tax should be low enough for poor people to afford it and the government will have to live within it's means.
Politicians could no longer divide and conquer by proposing to tax the other guy. If they change the rate, they change it for everyone.
This tax would be liberating, for once you paid your charge, you are free to seek your dreams.
This tax should be called the Liberty Tax.
"We can't stop this inflow and under the table employment."
That's BS!
Jail and fine employers AND HOMEOWNERS that hire illegals!
its the business owners who employ these workers that are getting away with murder - no payroll taxes, no workers comp, no minimum wage, etc. now you can argue that those taxes are too high, but plenty of employers are doing it honestly and paying them. and these same businesses who employ the illegals, probably do not report all of their incomes either. and don't even get me started on self-incorporated business writeoffs for automobile use - a total tax scam and a slap in the face to people who work, honestly pay their taxes, and have to buy their own cars with after tax money.
well, its kind of hard to ask every homeowner to screen the immigration status of everyone whom a contractor might hire to work their renovation. what am I supposed to do when my plumber comes in with his helper, ask to see the guy's green card?
the key word in what you wrote is "concept". these employers who hire the illegals now, don't want guest workers who are paid "above board". they don't want them, they don't want to pay, that's why they hire the illegals now. so the guest worker program will do nothing to eliminate that part of the underground economy.
the only thing the guest worker program will do, is give businesses who today do not/would not hire undocumented aliens, and give them a legal cheap labor pool to tap into. If the guest worker program passes, you've have Walmart and Home Depot and 1000s of other legitimate US businesses who today do not employ illegals (knowingly), sending buses down to the border to pick ip the new guest workers, and they will fire their american workers and ditch their wages, and hire the new lower wage guest workers.
I am not arguing illegal alliens. I am arguing the trend to consultants and contract workers rather than direct employees. I don't believe anyone is "getting away with murder." The consultant / contract employee is now responsible for providing his own office, computers, supplies, health insurance, pension, payroll taxes, etc. So long as certain conditions are met, it is perfectly lawful, which murder is not. It is an issue for the IRS because it is increasingly common - I am talking about legitimate US citizens who are educated professionals providing a service that a company willingly parts with money for.
This author writes, however, as if this is just another example of illegal aliens getting away with something, and that if they went away, this problem would disappear.
Really ? In what century ? What people don't realize is the employer still pays the taxes at his/her rate because you can't write off the labor costs without a check to back it up.
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