Required by Law

Most people have participated in the underground economy at some point of their life. All income should be reported according to the law but it’s not. I believe more income than we think is left unfiled for in income tax returns. I’m sure every person at least knows one person who has participated in the underground economy whether it is selling illegal drugs or holding a garage sale. It is important to file our taxes because the amount of money builds up with each individual.

 I myself have failed to report legally earned income on tax returns. When I babysat two kids last summer I did not report the income and neither did my mom when she babysat the same children. I didn’t even think to do it and if I had the option I probably still would not do it. One thing that was mentioned in class was the purchase of pirated films. I was also a part of this. Most of the movies I watched in my childhood were pirated films. Another situation was in high school, there was always that one student that had candy to sell and for their own earnings. The selling of illegal drugs is also very common in my opinion. Since junior high up until college I knew someone who was a drug dealer who sold marijuana or prescription medication. Then just a few years ago one of the faculty members of my high school was found guilty of soliciting to prostitution which is also part of the underground economy. So participation of the underground economy is very common.

Before this class I hadn’t realized that any of the things I participated in above or have witnessed were required by law to file taxes for. It makes me wonder the actual number of participants and how it may be a greater number than is predicted. With today’s economy I can understand the reason why people don’t file for taxes if they are self-employed because they can hardly make enough for themselves. In the sociology book, U.S. taxpayers fail to pay as much as $450 billion annually in federal taxes (International Revenue Service, 2012). That is a crazy amount of money!

Link: http://www.encyclopedia.chicagohistory.org/pages/1280.html

Link: http://www.bloomberg.com/bw/articles/2013-03-28/more-americans-work-in-the- underground-economy

Image: http://www.someecards.com/search?q=taxes