Any employer that knowingly and willingly breaks federal payroll laws and tax laws deserves a substantial penalty and fine. Our society depends on employers withholding taxes from employees. If abuse of the system is allowed, the entire governmental system will collapse.
Each and every year millions of businesses have to pay taxes. While it may be a burden for many of them, it is a necessary evil. When someone decides that they want to get out of paying taxes those costs are passed on to the next person in the form of higher taxes. If everyone did things the right way and paid taxes as they should then there could be lower taxes to everyone as a result. Considering the fact that taxes are raised when the country is in deficit, scamming the system by not paying your taxes increases the deficit and makes everyone suffer.
Companies who pay employees under the table in order to avoid paying taxes should face harsh penalties. Taxes benefit society and those businesses who try to work in an unethical manner should face tough punishment. There should be financial penalties and those fines should be put toward the taxes that the company did not pay.
Businesses that pay employees under the table are only creating a financial hardship for governments of all types. When the federal and state governments do not receive the taxes they expect, programs and other important things are cut to balance the budget. This could all be avoided if everyone followed the same laws.
It's unfair for some businesses to do their fair share to support public services and the common defense while others shirk the obligation, and unscrupulous firms are unlikely to change without legal penalties. It's also worth mentioning that firms that conduct their business under the table are more likely to exploit their workers and violate labor laws, since they are functionally less subject to oversight and often employing vulnerable people at the margins of the economy. It's one thing to argue corporate taxes should be lower; the democratic process can debate such a proposition. It's another and far more dubious proposition to say the government should be complacent about employers who avoid taxes by paying workers and not reporting the transaction. We need a fair playing field in this economy, which includes the requirement that labor and taxation laws are vigorously enforced.
By making a company keep good tax records, companies will be less likely to hire illegal (undocumented) workers. As they are already here, and they want to work, this in turn will compel immigrants to file for working visas or citizenship papers, making them legal, accountable, productive members of society. The stigma that illegal immigrants are stealing American jobs will be defeated because employers will have to pay wages to all of their employees based on federal guidelines.
Nobody likes paying taxes. However, the government needs to get money to function from somewhere. When people evade taxes, it increases the deficit. This then effects public services and deficit levels, and may result in higher taxes on the rest of the population. Businesses that pay under the table also commonly underpay their workers (many of whom are illegal immigrants, which are today's exploited underclass). They may pay less than minimum wage or not pay for all of the hours worked.
If there was a harsher punishment for businesses that choose to operate this way, then not as many businesses would do this. There are a lot of businesses that operate "under the table" to trick the system and it's very unfair to the faithful and lawful taxpayers that do everything they're supposed to.
Not only is it not fair when people don't pay taxes, it provides an inaccurate picture of our economy. The taxes that we pay are in huge correlation to the life we get to live. If you aren't paying taxes, you shouldn't be able to benefit from the provisions that taxes pay for.
Employers who pay people under the table to avoid paying taxes should face tougher penalties. It isn't fair to the rest of us that they aren't paying. However, oftentimes, the people receiving the under-the-table wages would be hurt considerably if taxes were taken out of their pay. This is a problem with two sides that both have good arguments. Employers should be able to afford to pay employees a good wage so that the taxes won't affect their ability to pay the bills. Employers should pay taxes because it's the law, period.
They wouldn't have to avoid taxes if they weren't so bloody excessive.
People are suffering from horrible health issues that they cannot afford, in this country, and I believe our government's number one concern should be dealing with fixing that first. I do believe people should be punished for crimes, especially not paying taxes. But, I also believe that, as long as there is already a punishment in place, then it is good enough.
Most jobs that pay under the table are not as lucrative as jobs with major companies. Therefore, punishing them would mean punishing the poor for trying to get by.
Although it seems compliance would increase if penalties were tougher, businesses are not likely to discontinue this practice, without more stringent enforcement. Stricter monitoring and better prosecution of these offenses are the tools to use to get businesses to stop avoiding taxes by paying employees under the table. This increase in prosecution would certainly have to be done across all businesses in order to be fair and avoid litigation.
My instantaneous response honestly was a "Yes, I agree" but I decided to do a little web research as I had a feeling that things were not all that simple as it appears.
I was right, as there are low wage workers like restaurant employees and maintenance workers who are working hard but are still at poverty level and who would be hard pressed to survive if they had to pay taxes. There are also other self-employed people that are barely scraping by and who may be doing contract work which keeps them from being homeless. In the long-run, these employees may suffer more if the employers are penalized and the government may wind up having to spend out more money in food assistance and other aid to families than it makes in increased tax revenue.
So, while my knee jerk reaction would have been to say, "I agree," the more compassionate and thus the better response is to say, "no, I disagree."
Employees have to realize that they are part of the problem too. If they have done legitimate business for their employer, they should receive a legitimate payment for their services. If they want to take an 'under the table' payment, it should be classified as an employee 'perk'. Why not make all business deals legitimate, or count it as a learning experience to the employee that does take an under the table payment.