...if you can find a better "legitimate" use for the money rather than pursuing the tax break, or even participating in the black market. I could avoid further taxation on my investment returns by buying gold/silver bullion, and selling later in small trickles for cash, unreported. Returns on precious metals usually aren't that much though. But it'd be rather hard for the government to find out my profit. Besides, long term capital gains taxes aren't that high, so it makes better sense for me to toss my investment budget in mutual funds.
But if the capital gains taxes got high enough, you bet your a3 I'd be going the gold bullion route, or other investments, or other evasion methods.
I could also take on a second job, but only if what I net is worth the trouble. You'll note that there's often a different hourly rate quoted for "under the table" vs. "on the books" in many occupations. The likelihood of someone working "under the table" increases as taxation increases. If the tax rate is "reasonable," a worker may not consider it worth the risk to evade. The higher the rate, the more it's worth taking the risk. The government can charge a lower rate, and have more people in compliance, or a higher rate, and fewer people actually paying it. |
