Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Underground Shadow Commerce is the Real Economy

Politics / Social Issues Apr 02, 2014 - 12:28 PM GMT

By: BATR

Politics

As the deadline for filing yearly income taxes is rapidly approaching, businesses especially hard pressed to make a profit in a depressed economy struggle with their tax compliance. Reporting legitimate deductions and costs is the easy part. When you are losing money, disclosing a diminished income stream based upon lower margins, is not a difficult decision. Nevertheless, small enterprises burdened with government regulation costs and tax obligations, often are unable to conduct business and retain a net return. Self-proprietorships frequently are so scared that many look to the cash underground economy to hide income earnings.


This shadow commerce, practiced throughout the world, is the real economy. Actually, in the United States, tax compliance is quite high by comparison. With the acceptance of instruments of credit, the banking system has become more of a tax reporting service than a financier of a healthy economy. The taxman would have you believe that voluntary transactions in cash constitute a black market in illegal dealing. Casting the dispersion of seedy activities upon the motivation to subsist is a common practice of governmental revenue agents.

Building upon this attitude, a deceptive title to a USA report, $2 trillion underground economy aids recovery, would have you think constructive criticism returned to the mainstream press. Sorry to disappoint, you can always count on the Gannett media to be a government mouthpiece.

"Shadow economies are usually associated with illegal activity, such as drug dealing. But anecdotal evidence indicates that off-the-books work in today's job market includes personal and domestic workers, such as housekeepers and nannies.

People are running out of patience when it comes to finding a job and losing income," Gonzalez said. "So it's not that surprising to have workers take jobs that are in the shadow economy. But it's a sign of how bad things are and how we have to get the real economy moving again."

Yep, blame the poor starving worker for accepting payment under the table by a greedy company owner who wants to beat down labor. What such ridiculous viewpoints lack is that the REAL ECONOMY is based upon main street enterprises for actual job creation. When state requirements become so burdensome that fundamental survival of a business becomes impossible by the tax demands, mere existence as a commercial entity becomes untenable for the entire economic structure.

Little is left of the free enterprise system. When a society imposes tax obligations and government regulations on garage sales upon property that the state has already collected their sales tax, the message is clear. You really own only a partial share of your items in partnership with the government.

Several issues are involved with the "business" of holding a garage sale:

    • Income taxes on the profits from the sale,
    • Sales taxes on the cost of the items sold, and
    • Local permits and licenses
    Trivia you say, as rightly you should. However, the entire basis of acceptable claims upon the wealth of individuals must be re-examined. Now we all know that the courts have ruled that a government can virtually tax any transaction. Yet, by this tortured logic, the natural rights of an individual are violated by such an unrestricted decree.

Terry Miller and Anthony B. Kim write in Defining Economic Freedom.

"Economic freedom is the condition in which individuals can act with maximum autonomy and minimum obstruction in the pursuit of their economic livelihood and greater prosperity. Any discussion of economic freedom has at its heart reflection on the critical relationship between individuals and the government."

As Friedrich Hayek once observed, "To be controlled in our economic pursuits means to be controlled in everything." (From - The Road to Serfdom)

By any reasonable standard, the real economy must be based upon voluntary transactions. Government extortion practitioners design the imposed partnership split, which is reported as the Gross Domestic Product economy. Tax collection is the habitual occupation of government. When tax penalties, onerously inflicted upon individuals for merely conducting business escalate, the natural result is that the engine of commerce slows.

John Locke "defends private property not for the sake of the rich and against the poor, but "against possible unconstrained encroachment by the state". Thus, Locke's views on property play a role in his argument for limited political authority." Since the natural law underpins the relationship of the individual with government, it becomes imperative that taxation reflects the inherent ownership rights of the property holder.

Therefore, when a purchase, made in the marketplace with a tax assessed upon the cost paid, it is not proper that the state should compel any additional claim on the value of the same item, if it is sold to another party in the future.

The underground economy distinctly accepts this standard. However, government is not satisfied unless each future transfer reaps additional taxes. Just ask a buyer of a used car. How many times does a sale tax need to be extracted after the initial payment?

Adopting the elimination of sale taxes for a consumption tax on a county and state level needs to become the correct approach. IRS bean counters would cry for a national VAT tax, like that in place in the EU, but that punitive burden would only benefit the growth in the Federal Government.

As for taxing labor by designating toil as income, is even more preposterous. The progressive cultists want a taxing code that penalizes industrial initiative, while entrapping and rewarding a social welfare culture.

Corporatist businesses use every trick and loophole to evade paying taxes. Yet this segment of the economy, characterized as legitimate business, processes withholding tax for their employees. For every company that manages the income tax theft racket, there are scores of underground business activities that enhance productive growth in a stagnant economy.

Greece, Italy, Portugal, Spain, Germany and France know well that the shadow economy is the real economy under socialism. As America descends deeper into the same abyss, more people will respond with creative and bold methods of doing tangible business.

James Hall – April 2, 2014

Source: http://www.batr.org/negotium/040214.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2014 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in