Monday, March 05, 2007

It Won't Happen To You

It probably won't happen to you. Or anybody that you know for that matter. But paying someone under the table is illegal. It's called tax evasion. And it can be a serious offense if you're found guilty.

But instead of thinking about it that way, think about it this way. What happens when you pay someone under the table? Here's what happens.

First off, your money goes directly into their pocket. It's not used to support our ever-growing government. So think about your social security. Think about your payroll taxes. Think about your father's disability benefits. Think about your cousin's medicare benefits. Everything gets knocked out of balance. Your future social security benefits are funded by you. Every employee pays a tax toward the social security fund. When your maid gets paid under the table, you stick it someone's grandchild twenty years from now. Because the social security fund is supposed to shrink to zero in about twenty years. All other taxes work the same. Your taxes are put into a pot. That pot pays out the benefits. Yes, you're only one person. But think about this. A 2000 study determined that the U.S. government was missing about $355 billion dollars due to payments received under the table.

Second, your money is never reported as income. So your maid gets a break when income taxes roll around. Is that fair to you? You have to pay taxes on every dollar that you earn. Why shouldn't everyone else play by the same rules.

Third, your maid is unethical. She's robbing the government. So what makes you think that she won't rob you? Think about it. What if you discovered that your maid stole a soda from the local convenience store? You'd fire her. Because you wouldn't trust her. And a soda is less than a buck. When you pay her under the table, she's stealing way more than a buck. And yes, she's stealing from you. Indirectly.

Finally, she's robbing you blind anyway. She gets to piggyback on our shoulders and charge you just under our rates. That way, she gets to look good because she's cheaper. And she also gets to make a killing. Because your money is all profit. There are no expenses. Just labor. But we charge our rates for a reason. We charge what we charge because we have to pay taxes. We have to buy supplies. We have to buy insurance. We have to pay our employees fairly. We have to do all these things in order to be legal.

Look, I'm not perfect. Everybody is guilty of this at some point in their lives. But under the table workers create a big problem. What may seem like savings may actually end up costing you more money down the road. Because the lost tax revenue has to come from somewhere. And guess who that person is?

YOU. Not your maid.

Click here to learn how to follow the rules

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