The Black Economy: Difference between revisions
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#REDIRECT [[Black market]] |
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{{Mergeto|Underground_economy|date=March 2006}} |
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'''The Black Economy''' is a hidden part of the economy, where private cash transactions, including income, go unreported, and therefore untaxed. An example of this is unrecorded [[moonlighting]]. The Black Economy is also known as the Grey, Unofficial or Informal Economy. |
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It includes legal transactions that are not reported to the tax authorities and the income from which goes untaxed and unreported. For instance, although it is legal to offer a taxi or catering service, failure tod declare the pay received is illegal. However, free-market economists would argue that, by not paying tax, the tax-evader has more incentive to work. |
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In some countries such as Macedonia, The Black Economy is so strong, that it stopped Macedonia going bankrupt. If Macedonia had to rely on its own official economy, it would have gone bankrupt long ago. Almost as soon as tax was introduced, people tried to evade it and over time this was called The Black Market. Because people try getting around paying Tax, it means that they are using services like police, without paying for them. |
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Marijuana, [[pornography]] and illegal labour have created a Black economy in the United States which now accounts for as much as 15% of the American economy, according to a study. Russia has a black economy, consisting of 60% of their economy. Some countries like China, are trying to cut down on The Black Economy, by shutting down places that are selling counterfeit items. They are also shutting down places, which are selling fake alcoholic drinks. If you pay your cleaner or builder in cash, or for some reason neglect to tell the taxman that you were paid for a service rendered, you participate in the black or underground economy. |
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The following is a table of the percentage of black economy in a particular country:- |
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Country Percentage of black economy |
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Russia 50-60% |
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England 5-10% |
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America 5-10% |
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Italy 30-40% |
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A site that shows that The Black Economy sometimes does better than the official economy, is the following:- http://www.guardian.co.uk/usa/story/0,12271,947880,00.html. |
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The Site says that, whilst the official economy was in trouble, The Black Economy was doing really well. |
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{{Cleanup|December 2005}} |
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Latest revision as of 12:35, 6 July 2010
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