Using the underground market risks more than a bad haircut
Resource Details
Author(s): Catherine E. Connelly
Date: June 8, 2020
No matter how scruffy you look these days, don’t get a black market haircut.
If the underground economy increases by even 10 per cent, we will lose up to a billion dollars in tax revenue. A billion dollars may not stretch as far as it used to, but it could pay for almost 15,000 more nurses for our long-term care homes. Tax revenue is sorely needed now, as budget deficits reach record highs.
Why is the black market thriving? Canadians have a new incentive to work under the table; the monthly CERB payments of $2,000 only stop when the recipients actually report their income. Money earned under the table doesn’t count, and this extra money is even tax-free.
Unfortunately, the black market hurts local businesses. Hair salons that provide their staff with masks, limit the number of customers inside and install Plexiglas barriers may have to raise their prices a bit to recoup these costs. Because black market competitors can charge less, businesses with integrity may struggle to keep their customers.
If the underground economy increases by even 10 per cent, we will lose up to a billion dollars in tax revenue. A billion dollars may not stretch as far as it used to, but it could pay for almost 15,000 more nurses for our long-term care homes. Tax revenue is sorely needed now, as budget deficits reach record highs.
Why is the black market thriving? Canadians have a new incentive to work under the table; the monthly CERB payments of $2,000 only stop when the recipients actually report their income. Money earned under the table doesn’t count, and this extra money is even tax-free.
Unfortunately, the black market hurts local businesses. Hair salons that provide their staff with masks, limit the number of customers inside and install Plexiglas barriers may have to raise their prices a bit to recoup these costs. Because black market competitors can charge less, businesses with integrity may struggle to keep their customers.