Quote:
Originally Posted by Dan02
I think though this has a rather interesting side benefit these economists are ignoring. Probably the most substantial part of the underground (untaxed) economy exists within the home renovation sector, these tax credits could end up bringing a substantial amount of the under the table deals back on top so they can claim the credit.
|
I agree there would be a side benefit, but I do question how much of the underground economy the home renovation sector is responsible for. If it is indeed 42.4 billion dollars, then I would be shocked to know that renovations would account for a significant portion of it. I don't know everything that comprises the underground economy (or how they would even get an accurate value of it), but I would expect that the sales of illicit drugs would be the major component.
If I am wrong and this indeed would make a significant difference, then would it also not follow that if it brought a substantial amount of these deals back "onto the table" where they could be taxed, then we could also expect a significant raise in prices for home renovations? I am not saying that we should accept these "underground" deals, but I do think the economic benefits of reducing them through this tax credit are being overestimated.