< link rel="DCTERMS.isreplacedby" href="http://sirhumphreys.com" > Sir Humphrey's: Underground economies


SITE MOVED:Sir Humphrey's has moved

Please join us at our new site: www.sirhumphreys.com.

The RSS feed for sirhumphreys.com is now here.

Friday, August 26, 2005

Underground economies

Eric at Classical Values ponders the growth of blackmarkets
I'm wondering whether the rapid growth of this burgeoning underground economy might be directly correlated directly with the rise in completely insane government regulations with which normal Americans are unable to comply. Am I alone in considering it absurd that the federal government -- while it might let me have sex with my gardener in my bedroom -- nonetheless wants to force me to verify his identity if I pay him to cut my grass, become a revenue agent for the federal government, and send me to prison if I don't?

Lest anyone think I'm engaged in hyperbole, take a look at an ordinary accountant's description of what I must do if I pay the guy for gardening:
Not just America baby, not just America.
ยท Linked Article

Posted by Chefen | 8/26/2005 05:58:00 pm


Blogger Lucia Maria said...

Last year the IRD came out with a real doozy in their brochure that they send out regularly to businesses. Their new rule was going to be that if you were a tradesperson and you did something for someone for free (say you were a plumber and you fixed your mother's dripping tap), you were still liable for the GST portion of the work, even though you hadn't collected it from your mother. I have no idea if tradespeople are complying.

8/26/2005 06:07:00 pm  
Blogger Chefen said...

So what is the GST on $0 these days?

8/26/2005 06:37:00 pm  
Blogger Lucia Maria said...

Oh no, it's the market value of the work. It's whatever you'd charge someone if you were doing a paying job. 12.5%.

8/26/2005 07:34:00 pm  
Blogger Ashley Clarkson said...

Great - so you don't get the nicer profit margin for your business, but you get hammered for tax purposes. How generous of them.

8/26/2005 11:45:00 pm  

Post a Comment

<< Home