Documented/Formal and Undocumented/Informal Economy:
The question of taxation of the informal/grey economy in context of developing & transition countries has been in the spot light in recent years. According to OECD’s book titled ‘is informal normal’ informal economy forms 60% of world’s total economy and in south and south east Asia, informal economy accounts for up to 70% of economic activity in sector like agriculture.
The formal or documented economy comprises of the industries, firms and economic activities that are taxed, monitored and regulated by the government, while the undocumented or informal sector entails employment and firms that are not regulated and taxed by government. The term of informal economy or sector was coined in 1973 by British anthropologist Keith Hart in his study on Ghana.
In recent years taxation of
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Increased taxes from a broader tax base is important revenue source to fund the infrastructure that is a utility available to all citizens. Increased tax revenue can be vital in supporting and enhancing national defense and security expenditures, constructing road networks, social services, health and education. Without revenue from taxation these services cannot exist. iii. Documentation of informal sector reduces the economy’s resistance to policy-induced reforms. iv. Documentation or formalization of informal economy reduces the risk of large and widespread illegal activities that remain hidden from the view of tax and regulatory authorities.
v. Informal sector battles all government efforts to avoid taxation and if government initiative is not successful it will result in continued low tax-to-GDP ratio and necessitating government’s reliance on foreign assistance and funding to plug the fiscal shortfall. vi. Documenting or formalization of informal sector will help improve the economic efficiency and productivity because undocumented economy is inherently uncompetitive and locks the economy behind a low productivity
In his Book, Off the Books: The Underground Economy of the Urban Poor, Sudhir Alladi Venkatesh, explains that in the early-nineties while doing field work in the Southside of Chicago he gravitated to a predominantly working-poor black community near his field site (ix). Venkatesh describes the ten-squared block community as being in disrepair very much like the high-rises that were being torn down in the surrounding area (iv). In the presence of some “greystones” and “brownstones” Venkatesh noticed vacant lots, beat-up homes, and what he perceived to be inadequate city involvement in the community -streets need fixing, and trash pick-up was lacking (x). There were also closed storefronts and burned-out buildings in the area (Venkatesh, 92).
However, these tariffs and taxes were not accepted without challenge, as many merchants believed that the restrictions were without warrant. With revenue to acquire, and regulations to maneuver around, the smuggling industry evolved from a black market business, to profitable occupation that would take the nation by storm. Analysis of documents from this century reveal through the illegal trade of brandy, wool, and other goods, acts of Parliament were opposed head on by members of the working class looking to to capitalize on the economic growth. In order to understand the smuggler, it is imperative to understand the demand for those willing risk their livelihoods in order to secretly move goods in and out of the country.
People may not like taxes but they are used to invest in new Technology, education and public welfare of the people like Medicare, Medicaid, social security, and general protection. They can borrow money but that always affect taxpayers but the money will always be repaid to the lenders but the only way is by raising taxes (Concurrent Powers). Concurrent powers are able to enforce laws, "...law
Colonies fought and won a war against Britain to declare their independence. In the eighteenth century, being an American meant having a government that changes and evolves over time. It meant having ideas that change over time for the benefit of the people. While some of their ideas were terrible, they did help shape both Americans and America to what it is today. To be an American means to have the same rights as everyone regardless of who you are, the freedom to practice whatever you want, and obligation to try to make this as great of a country it could be.
Why do we need money? Do we need money because of our wants or needs, or both? Money is an essential aspect in our society in which we use to supply our needs and wants. Everyone in our society thinks differently in respect towards if you have more money than more problem. In the contrary, if I were to give you a million dollars I highly doubt you will have more problems instead more problems solved because you have more money.
(121). Kristof validates his view because he has experienced and viewed how sweatshops increased living conditions. He credits himself as a credible source to express the knowledge he possesses is
Draining the rich of their money will not help those who are poverty stricken. It could cause the opposite of the intended effect (more equal income) and cause a greater amount of poverty and less chances to earn a living. A wealthy person is generally thought of making more than $300,000 a year and usually has stock, real estate, or both. In developed countries, such as the United States, “income inequality has increased since the 1980s” (Woo 5).
Population Growth expands the tax base and results in more tax
The federal tax system is plagued with issues: It doesn 't raise sufficient revenue to back government spending, it is unpredictable, it makes results that are unreasonable, and it impedes monetary productivity. This part examines a few approaches to enhance charges, including making an esteem included duty, expanding natural taxes, improving the corporate expense, treating low-and center pay workers evenhandedly and productively, and guaranteeing suitable tax collection of high-wage family units. A good tax system raises the incomes expected to fund government spending in a way that is as basic, evenhanded, and development well growth as could reasonably be expected. The United States does not have a good tax system.
It will further elaborate on the ongoing debate about what role laws and regulations should take on the growing issue of sweatshops and child labor, and how they can be improved on without disabling the poverty-stricken foreign workers, who may rely on this type of work to support their families. The proceeding essay will take on the cause and effects as well as a few pros and cons of sweatshops in the United States regarding the beginning of sweatshops and the effects on people involved. A few of the main ideas will include contributors that began sweatshops and how it has evolved, why laws and regulations were implemented and if they’re making a difference or not, as well as the pros and cons that come along with the
Over the past decade, the world has changed drastically due to globalization. Although everybody experiences it, the third world countries are proven to be the most affected. Not only does it affect the economic, political and cultural aspects of the world, but it is also one of the main factors for the growth of crime rate. Although globalization may be sought to be an opportunity for developing countries to improve, those who benefit are minorities.
This definition also includes workers that are self employed and home workers however it does not include informal wage of workers who are within the formal, registered businesses. Additionally informal businesses deal with legal goods and services and the way in which the business is operated is legal, which everything is done by the book. However, the international labour organization has changed the definition of the informal sector so that it includes both the self-employment in informal ventures and employment that is paid for in informal jobs. This definition suggests a wide approach that recognizes the informal market in its relations to the formal market rather than a strict division between formal and informal.
It extends to the other informal settlements of different sectors of economy including factory workers, taxi drivers and many other small workers who is a part of Metro Manila by providing small scale services to the people of the city. These people also face a major problem in finding affordable shelter in the city, and they are displaced to the periphery areas which are remote to the city and their place of employment. The only difference between these two types of informal settlements is that unlike seawall informal settlements, these informal settlements do get noticed by the people living in the city and the government due to their spill over and public place of
Poverty can adversely affect the population in so many ways. Families living in poverty can face emotional and social challenges, cognitive lacks and health and safety issues and acute and chronic stresses. Levels of stress increase with the economic circumstances. Subsequent poverty and job loss are associated with violence in families, including child and elder abuse. These families are also more likely to be exposed to illnesses, job loss, eviction, criminal victimization and family death.
Informal Networks The article written by Richard McDermott and Douglas Archibald talks about informal networks in companies. Informal networks are more a kind of informal groups that are automatically formed in a company. The main motive behind forming this socially based informal group is to share knowledge. These informal networks have many names peer groups, communities of practice, functional groups etc.