Monday, December 17, 2007

Revised Response to: The government should eliminate the underground economy.

As a representative for the Department of Justice and I have to present the advantages and disadvantages of the underground economy, I would give strong argument for both sides. I would start off the presentation by giving the disadvantages of the underground economy. The disadvantages of the underground economy are that it hurts the economy and everyone in the country that contribute to the economy. Those who participate in the underground economy avoid their tax responsibilities at your expense, and place an unfair burden on all law-abiding taxpayers. Unpaid taxes mean less money for programs, such as health care, childcare, employment insurance and pensions. Also the underground economy undermines the competitiveness of businesses and citizens because it takes away their taxes and goes against the legal ideas. The underground economy is illegal because of what it does to the economy as a whole and it takes away money from the people and gives it to others who don't deserve it. Again it is against the law because of tax evasion and the result is the loss of a job, business, homes, family, and freedom. A long jail sentence and The IRS has access to a variety of tools to detect and prosecute those who do not report all of their income, including information-sharing agreements, on-site visits by officers, information obtained from third party reporting systems, leads from other audit files, and lifestyle audits. There aren't that many advantages of the underground economy and they only involve the people that are in the illegal economy. For consumers, paying "under the table" for a job is not a better deal; if you pay cash you have no warranty, no recourse for poor workmanship, and the added risk of liability if an injury takes place on your property. As a person who is involved in this economy the risk is jail but if they are good at it, there are no taxes to be paid, no insurance or liabilities. Also if a person is good at breaking the law and not getting caught then a lot of money can come out of it because of the high demand for illegal goods that are purchased on the black market. The avoidance of tax is the biggest part as the consumer will avoid a tax on the good and the producer doesn’t have to give any money to the government for the good or anything. That is why it is so illegal for this black market to be occurring underneath the government's nose.

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