Underground Economy

There are people who work a full time job, 40 hours or so a week, pay taxes n the money they make and that tax money goes to the economy. Then there are people who work under the table, or get payed without being taxed on the money they make. This is part of the underground/shadow economy. This underground economy can be good and bad. "There is consumer spending in the short term...and thats boosting the economy," says Schneider. People have money at that mment bu that mney is not getting taxed on. This is good and bad. It is good becuse that person gets all the mney they earned right then and there. But none of it is being put away for Social Security, etc. They also do not get benifits. The government loses tax money by having all of these people work under the table. "...about $500 billion in txes were lost last year because of unreported wages, versuses $384 billion in 2001" (Koba 2). "Those wokring and not paying taxes puts the burden on those who pay the taxes...taxes could be lower if the government were able to capture the underground economy instead of raising taxes on those currently paying the various income and payroll taxes, " says Fiorenza. Basically, if so many people were not getting paying under the table then taxes may be lower.