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NCJ Number: 82079 Add to Shopping cart Find in a Library
Title: Beating the System - The Underground Economy
Author(s): C P Simon; A D Witte
Date Published: 1982
Page Count: 310
Sponsoring Agency: Auburn House
Westport, CT 06881
National Institute of Justice (NIJ)
Washington, DC 20531
US Dept of Justice NIJ Pub
Washington, DC 20531
Sale Source: Auburn House
88 Post Road West
Westport, CT 06881
United States of America
Language: English
Country: United States of America
Annotation: This book provides a sector-by-sector microeconomic analysis of the underground economy -- tax evasion and transactions involving payment in money or similar goods but not officially recorded in statistics or subjected to taxation -- and suggests policy recommendations to reduce this siphoning of public revenues.
Abstract: The book's first section examines unreported income gained by tax evasion and public benefit fraud, as well as unreported income due to the illegal status of sellers of goods. The second section covers illegal transfers of people and goods (illegal immigration, the theft and fencing industries, smuggling). The third section deals with production and distribution of illegal drugs (heroin, cocaine, and marijuana) and services (fraud arson, illegal gambling, loan sharking, and prostitution). For each section, the text investigates the economic organization of the crime, size and growth of the problem, and its relative importance to the economy. Findings indicate that the largest underground market is the nonreporting of legal income, an activity which grosses roughly one-half of the total national income. The largest sectors in the illegal goods and services markets appear to be cocaine and heroin distribution and, possibly, prostitution. The fastest growing sectors are the employee theft portion of the stolen goods market and the fraud arson industry. The microeconomic approach provides insight into the diverse sector activities, their varying growth rates, loss of public revenue, and distortion of the major economic indicators on which policy is based. Furthermore, it reveals the association of these transactions with government laws and regulations which were not carefully developed before implementation. Study findings suggest a number of policy directions: revision of tax laws; improvement of document matching procedures; increased reporting at the source; increased compliance efforts against the self-employed, corporations, and those with rental income; and modification of current enforcement laws to facilitate police control of illegal activity. Tables, separate chapter notes and references, and an index are supplied.
Index Term(s): Arson; Black market; Cocaine; Crime costs; Dealing in stolen goods; Drug law offenses; Economic analysis; Economic influences; Fraud; Illegal gaming/gambling; Immigration offenses; Loan sharking; Marijuana; Policy; Program abuse; Prostitution; Smuggling/Trafficking; Tax evasion; Underground economy
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