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NCJRS Abstract

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NCJ Number: 50552 Find in a Library
Title: FAST GROWTH OF THE UNDERGROUND ECONOMY - VIEWS OF P M GUTHMAN
Journal: BUSINESS WEEK  Dated:(MARCH 13, 1978)  Pages:73-75
Author(s): ANON
Corporate Author: McGraw-Hill Publishing Co
United States of America
Date Published: 1978
Page Count: 3
Sponsoring Agency: McGraw-Hill Publishing Co
New York, NY 10020
Format: Article
Language: English
Country: United States of America
Annotation: GROWTH IN THE INCIDENCE OF ILLEGAL UNDERGROUND ACTIVITIES, SUCH AS PROSTITUTION, GAMBLING, AND NARCOTICS, IS DISCUSSED.
Abstract: A CONSERVATIVE ESTIMATE PLACES THE INCOME GENERATED IN THE UNDERGROUND ECONOMY IN 1977 AT $195 BILLION, ABOUT 10 PERCENT OF THE RECORDED GROSS NATIONAL PRODUCT. TO THE EXTENT THAT THE UNDERGROUND ECONOMY IS GROWING FASTER THAN THE LEGAL ECONOMY, BOTH THE LEVEL AND RATE OF GROWTH IN ECONOMIC ACTIVITY ARE SERIOUSLY UNDERSTATED BY GROSS NATIONAL PRODUCT FIGURES. THE OFFICIAL UNEMPLOYMENT RATE PROBABLY OVERSTATES THE AMOUNT OF ACTUAL UNEMPLOYMENT, AND THE UNITED STATES MAY BE APPROACHING THE POINT WHERE HEAVY MARGINAL TAX RATES ARE ERODING THE TRADITIONAL BELIEF THAT CITIZENS VOLUNTARILY PAY THEIR TAXES MORE READILY THAN INDIVIDUALS IN OTHER DEMOCRACIES. THE UNDERGROUND ECONOMY NEEDS CASH TO OPERATE; THIS AFFECTS THE CIRCULATION OF MONEY. IF TAXES WERE PAID ON UNDERGROUND INCOME, THE DEFICIT BETWEEN INCOME REPORTED AND ESTIMATES OF INCOME NOT REPORTED ON TAX RETURNS MIGHT VANISH. THE GOVERNMENT ESTIMATE OF FAMILIES WHO LIVE IN POVERTY IS UNDERSTATED BECAUSE OF THE UNDERGROUND ECONOMY. HIGH TAX RATES ARE CITED AS ONE INCENTIVE FOR THE DEVELOPMENT OF THE UNDERGROUND ECONOMY. (DEP)
Index Term(s): Controlled Substances; Illegal gaming/gambling; Prostitution
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=50552

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