The Shadow Economy Is Luring Workers Out of the Labor Force

[Gary and Alla 3,694]

http://www.fool.com/investing/general/2013/12/14/the-shadow-economy-is-luring-workers-out-of-the-la.aspx

A good reason for the FAIR TAX. $2 Trillion in un-taxed income just waiting to be added to government revenue to pay for things like...health care!

Maybe if we had a reliable revenue stream instead of partisan bickering over what is generated by a tax system most interested in social modeling, maybe we could produce actual benefits for citizens.

Not to mention...

Make the US THE tax haven for business in the world.

Eliminate IRS game playing to benefit one political faction or another

Eliminate the "costs of compliance" for US business and allow them to use the money to actually produce something

[Tim/Mav 305]

I'm glad I don't understand this.

But, If we get in trouble the President will be safe in Airforce One.

[OnMyWayID 1,489]

I'd love to know the makeup of the underground economy.. Can't be a bunch of guys hitting the thrift stores and then eBaying the booty for money.. How much would changing the tax code work and how much is because of the paperwork required to be legit?

Edited December 15, 2013 by OnMyWayID

[Gary and Alla 3,694]

I'd love to know the makeup of the underground economy.. Can't be a bunch of guys hitting the thrift stores and then eBaying the booty for money.. How much would changing the tax code work and how much is because of the paperwork required to be legit?

"The Fair Tax" book can help you.

A large amount of the money is illicit trade. Drugs, prostitution. Independent contractors working for cash. Any skilled construction worker, when laid off for the season, quickly goes to work for cash. We have handed it to them.

Construction in Vermont (and many northern states) has a substantial season of layoffs, usually beginning in November, peaking in January and people begin to come back to work March 1. Almost all are back by April 1. They collect unemployment which is direct deposited to their bank account. They do not have to seek work as it is a seasonal layoff and they have a return to work date.

These men are carpenters, electricians, laborers, plumbers. Guess what? They jump in their campers, drive down to NC, SC. GA. AL, FL and do work for CASH, mostly home repairs and remodeling. Working "snowbirds". They withdraw their money by an ATM or just pay their bills online through their bank here. Nearly a 1/3 of their annual income is CASH.

The state tried to address this by requiring workers laid off for more than 10 weeks to perform a job search and report weekly. Great idea. They can do the job searches by internet. Bad idea. So now, workers laid off for more than 10 weeks, apply to local jobs by internet...usually jobs they are not quaified for to make sure they are not called for an interview, and send in their report with their weekly jobless filing.

Billions and Billions of dollars un-taxed.

Now what we have is long term unemployed who have established their own businesses as contractors and work for cash or personal check, year 'round. This is the shadow economy and it has doubled in value as the workforce participation has declined

The FAIR TAX eliminates income tax and applies a national sales tax. You pay tax when you SPEND the money, not when you earn it. No matter how you make the money you get taxed when you spend it.

Edited December 15, 2013 by Gary and Alla

[OnMyWayID 1,489]

"The Fair Tax" book can help you.

A large amount of the money is illicit trade. Drugs, prostitution. Independent contractors working for cash. Any skilled construction worker, when laid off for the season, quickly goes to work for cash. We have handed it to them.

Construction in Vermont (and many northern states) has a substantial season of layoffs, usually beginning in November, peaking in January and people begin to come back to work March 1. Almost all are back by April 1. They collect unemployment which is direct deposited to their bank account. They do not have to seek work as it is a seasonal layoff and they have a return to work date.

Is the idea that changing the tax code would decrease the need for the underground economy or because it would find a way to tax it?

[Karee 4,191]

The FAIR TAX eliminates income tax and applies a national sales tax. You pay tax when you SPEND the money, not when you earn it. No matter how you make the money you get taxed when you spend it.

The problem with that is that everyone would pay the same rate. It would unfairly affect the poor. The price of a 3 pack of Black and Milds and 40 ouncer of Colt 45 would go through the roof. The democrats wouldn't be able to satisfy their base by giving them free money for votes (EITC) via the tax code. How could they possibly go out and campaign on "I didn't give you any free stuff this term"?

Edited December 15, 2013 by Karee

[Darnell 8,479]

Gary - it seems you have a problem with the labor force in Vermont.

I ask that you fix it, you've about 7 more hours this Sunday to formulate the plan, and then all week to implement it.

Go Get Em, and Good Luck !

[GandD 5,966]

The entire economy is based on people's spending capability as it is now. As Karee said, removing the income tax on everyone at the same time would absolutely favor the rich as the cost of all goods would jump sky high immediately.