Skip to comments.80% admit they pay workmen cash in hand: Failure by tradesmen to declare earnings said to costů(UK)
Posted on 05/08/2014 11:20:32 PM PDT by Olog-hai
For homeowners eager to save money on repairs, its a tempting propositionyou pay a tradesman cash-in-hand, he knocks a bit off the bill, and no questions are asked.
With the builder or plumber failing to declare their earnings and pay any tax, such secret payments are said to cost the economy £2 billion a year.
Now a survey suggests the black economy is booming, with more than four in five homeowners admitting they have paid a workman cash-in-hand. Not only that, but 30 percent have done it three times or more in the past year alone.
(Excerpt) Read more at dailymail.co.uk ...
No . . . having excessively-high tax rates and nanny-state regulations is what costs the economy. Lower taxes, and revenue will go up. (£2 billion = $3.4 billion ATTOW.)
80% admit they pay workmen cash in hand: Failure by tradesmen to declare earnings said to cost economy £2 billion a year
Sounds like an honorable and fiscally sound tradition to me.
It may cost government extra tax revenue, but not the economy. It actually a positive
True. Something of value was created and the person responsible was rewarded for it. Half of society has come to the bizarre conclusion that person B spending person A’s money somehow benefits the economy more than person A spending their own money.
Yes, it is a positive. It puts more capital in private hands where it gets used more efficiently.
I have no problem with it, until said tradesman also collect social security disability, food stamps, Obama phones, etc while they’re working this underground economy.
And since the Feds collect a tax on income, only honest citizens are taxed for their work.
A national sales tax or national property tax would be less easily avoided by the dishonest.
And gives a competitive advantage to the dishonest.
A friend from Nicaragua, here legally, keeps me informed on the underground economy. Need a plumber? A real company carrying the many state and federal imposed insurance, bonding, minimum wage, unemployment insurance, license fees etc. charges you $250 to come out, but if you hire them it gets included in the price. Then theres the significant markup on materials and the (I think) $90/hour cost. So you may be looking at more than a mortgage payment to fix a leak. One of the things he could not get taken care of was pumping his septic tank. Because his English was poor and he cant say the name of his street, I took the yellow pages intending to get prices from three suppliers for him. The first five in the book were out of business. Theyre out of business because the drop in business caused by the Obama economy left insufficient business to carry the high fixed costs imposed by government. You can multiply this issue by almost every service you can imagine.
Ive moved to a modest neighborhood in the woods to lower my expenditures. My neighbors are mostly making it paycheck to paycheck. Before they discovered my friend and his contacts problems from leaking roofs and plumbing and other serious issues went unaddressed or they suffered terribly on some other level to address them. The problem is not illegal aliens as some of the workers are Americans. It is the high fixed-cost burden placed on companies. Without people willing to do the work more cheaply my neighbors house would be progressively more damaged by unaddressed problems.
I feel for the company owner, having owned two myself. (I lost the last one entirely for government caused reasons. I could have weathered the early 90s downturn by simply taking a job until the economy improved. But the cost of being registered, a requirement in my field, had jumped from $15 to $1,500.)
“With the builder or plumber failing to declare their earnings and pay any tax, such secret payments are said to cost the economy £2 billion a year.”
Only in a socialist society (US not excepted) is tax avoidance said to ‘cost’ the economy by reducing the amount of tribute rendered unto fedgov (or gov at any level).
Cut taxes and regulations. Free up the engine of commerce. Revenues go up. It’s been done, and can be done again.
So stop taking such a big chunk of the HONEST worker’s earnings!
Twice last winter I found myself with a snowblower unable to start and a mandatory removal job staring me in the face. Both times a young person happened to be walking by carrying a shovel who offered to help and I took them up on it.
Somehow in all the excitement of the snowstorm the conversation never evolved into tax forms, insurance, or any other goofy stuff but cleared snow.
Black economy, or white out regulations? I suppose it depends. I do know everyone was happy afterwords. The city, county, state and postal service. Along with the young folks and me.
I’ve done it and saved buckets of money, most recently on a concrete double wide 75 feet long drive way. I win, the contractor wins and the greedy corrupt government loses.
Why do you think so many illegal immigrants don’t pay into the system and never will and the reproduce faster than any other demographic. They are also a huge portion of the demographic that uses social welfare programs. So ask me why so many of the muncipalities are going broke in cities with a very large illegal immigrant population and I’ll give you two guesses as to why they’re going broke.
It sounds like fair to women
Party A engages in business transaction with party B for cash. If the work performed is as agreed upon and satisfactory where is the dishonesty?
Your HONEST worker is not entitled a job. He can sit idle and starve until he realizes that the taxman, unions and burdensome regulations and fees are the true cause of his unemployment and the ones that take a big chunk of "his money".
Go back and read the article paying particular attention to that part that work is not contracted for by people who can't afford the bloated HONEST cost. Work that is needed and necessary doesn't get done. The elderly who might have performed the work themselves when young and fit find themselves on the horns of a dilemma. Use the cash unrecorded option or watch their equity decline sharply because the necessary repairs or maintenance are out of reach. And of course the devaluation of their property affects the immediate neighbors. End result eventually is another Detroit.
Free market rules always, even in the most totalitarian states.
Your comment is rather like a slave being indignant that a free man walks about and desires that man to become enslaved as well instead of yearning for freedom for himself.
Recent reports find EBT cards being used at HI and Las Vegas resorts and on cruises. So you know the users are working underground and not declaring income.
Most people who are honestly working 40 hour weeks can't afford to gamble in Vegas, go to HI, or take cruises.
But there has always been an underground economy (which grows as taxes grow) and always will be. And there will always be people who will mooch off the gubmint system. You have to attack the problem from the mooching end.
Another option is to simply LEARN how to do the work yourself, as 95% of the jobs can be done by the home/auto owner alone. Of course you need tools, but they cost next to nothing. And unlike even 10 years ago, you can cheat now, by watching Youtube for just about any repair (something I refuse to do).
Want a big oak taken down hereabouts ?
$350 via check.
I’ve met klutzes that cannot learn such skills to save their lives.
And of course, for bigger jobs, you had better have some loyal friends or strong family members.
It benefits the informal(underground) economy but not the formal economy.
In the US, some small business do this but many will limit it because it detracts from building equity or value in the business, which detracts from the price that the business owner can sell the business for and/or makes it harder to borrow money to expand the business.
But for a business that relies mostly on labor for profit, rather than selling, it is more likely. Its harder to build "blue sky" in a labor dominated business.
During economic downturns the informal economy always expands as the formal economy contracts, because as revenue shrinks more temporarily shift to cash transactions to avoid taxes as a way of offsetting falling revenue. Then as the economy recovers, they will shift back to reported transaction.
Some places, like Mexico, the informal economy is much larger than the formal economy.
“Sounds like an honorable and fiscally sound tradition to me.”
On a fundamental level, there is something wrong with a society where this is somehow “illegal”.
” And unlike even 10 years ago, you can cheat now, by watching Youtube for just about any repair (something I refuse to do).”
This is NOT cheating - except that you are cheating yourself. The Internet is a tool, like any other - a wrench, a saw,a a ruler, or a textbook. I’ve done things that I’ve learned how to (successfully) do things that I couldn’t even have imagined doing 20 years ago with what I’ve read and seen on it.
Of course, you DO have to separate out the “garbage” from the gold...
Excellent point. That’s a subtlety you won’t find in this kind of story.
I disagree Antiyuppie, there is cheating going on, just not the type you are thinking of.
The real cheating occurs when you do the work yourself. This means that you aren’t paying another person, who will pay taxes on the income, and thus you are cheating the government out of it’s money.
Don’t forget barter. Sometimes to sweeten the deal, we let them keep any the cars they find when they mow the grass around the double wide.
The black economy might be the only thing keeping them from sinking into the ocean
How is it costing the economy anything? It’s probably helping
In Sweden there are always two prices. The black price and the white price.
We recently had a huge tree taken out and the rest of them trimmed. Licensed business quoted us $3300. Hubby said.....how much in $100 bills? $1600, because that meant NO PAPERWORK or taxes, etc. I am ok with that. Quite a difference. I took that $1800 savings and helped pay for new carpet. So 2 businesses got our money instead of just one.
That is correct. I'd bet that the £2 billion a year number is off by a factor of 5-10.
Eliminate the social welfare programs and the problem is solved.
Charity should be voluntary.
I can drop a tree in the woods if need be. When the tree is big or close to the house, professionals are worth their money...
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