Cheating is fast becoming an accepted way of life if you wish to become successful. The most recent incident in the news has been the Armstrong affair and the questionable actions by a leading football player at Notre Dame. You do not have go far today to find examples of cheating and fraud. All one has to do is to read the paper, listen to the radio or watch TV. In many case cheating by noted sports individual, political leaders and Hollywood celebrities quickly become front page news, due to those who relish in the details of some juicy scandal. Day to day cheating is also on the rise. Cheating at work or on one’s spouse is becoming more common place. So does cheating really matter beyond the moral consequences of the action if it only affects the parties involved? Perhaps not, but what most people fail to realize is that acceptances of cheating by society in general has a significance impact on our economy. It is called “the underground economy”.
Over the years the underground economy has grown to where it currently estimated that the lost revenue to the government is estimated to exceed 2 trillion annually. This is huge lost for a revenue starved government that has to borrow 40 cents on a dollar in order to pay its bills.
The underground economy consists of both illegal such as prostitution, gambling and legitimate cash-based activities such as online auctions or bartering services. The basic problem for the government is the inability to track the cash-based operation. This allows individual who deal in cash to underreport their activities or not report their activities at all resulting in a zero tax liability for the government.
Many individuals feel that the underground economy is necessary to support the urban poor; where the easy money concept of criminal activity for the urban poor often becomes a greater lure than pursuing legitimate means of earning a living. Underground economy can also be found in farming and construction where some portion of the estimate 11 million illegal aliens work on a cash bases (sometimes less than the minimum wage) for employers who take advantage of this type of labor pool.
If the government cannot track cash-based activities, maybe consideration should be given to a valued added tax where everyone is forced to pay for what they buy or for services rendered.
It does not matter whether you support the underground economy as a necessary consequence for the poor; the basic fact is for those who are part of the regular economy are going to make up the difference with additional taxes. In short, someone has to pay and right now it’s you!
The comments made in this blog are those of the writer and are not to be considered solutions to any specific problem. Please our Web-site at Compass Strategies Group. Com.