published Sunday, January 15th, 2012

ObamaCare may spur more underground businesses

An article on the high number of California companies that evade taxes and other government costs by paying employees under the table noted that ObamaCare may make the problem of underground businesses even worse.

Many small businesses will have to start offering federal government-approved medical insurance to their employees two years from now -- whether they can afford it or not -- or they will face stiff fines.

Frank Neuhauser, head of the Center for the Study of Social Insurance at the University of California at Berkeley, told McClatchy Newspapers: "I have to think the underground economy sector will become larger when employers are also trying to avoid the cost of health insurance as well as workers' comp. It will double the incentive for employers to go underground."

The prospect of more illegally run businesses doesn't sound at all like the wonderful benefits promised by Democrats in Congress who passed ObamaCare.

We do not advocate breaking the law even for the purpose of avoiding the counterproductive, unconstitutional costs and penalties associated with the ObamaCare socialized medicine law. A business that employs workers off the books creates a disadvantage for employers who try to obey the law.

But so long as there are taxes, there will be both lawful attempts to avoid those taxes and unlawful attempts to evade them. And imposing new taxes guarantees an increase in attempts to avoid those costs legally or evade them illegally.

That does not mean, of course, that there should be no taxes. But it does mean the federal government should proceed with caution and consider well in advance the harmful, unintended consequences that result from new taxes or penalties. And Washington should not even consider such a tax or penalty if it violates the Constitution, as ObamaCare plainly does.

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Seems to me you would be happier to make a world with no criminals by eliminating all laws, then declaring victory.

But the health care reform law will not give us socialized medicine. More's the pity. It'll just do what Republicans always wanted and give the keys to the insurance companies.

PS, those companies are also employing illegal immigrants. I I'll wait for you to suggest less rwstrictive immigration laws with bated breath.

January 15, 2012 at 1:50 a.m.
conservative said...

Hmm, people cross state lines to avoid paying much smaller taxes such as tobacco, gas, and sales taxes. Will there be a growth in the underground economy to avoid a much higher tax? Is Obamination a Socialist?

January 15, 2012 at 4:04 p.m.
LibDem said...

I hope my drug dealer doesn't go underground to avoid healthcare costs.

January 15, 2012 at 5:22 p.m.

People go to a lot of trouble to evade taxes of all kinds. If this is news yo you, let me tell you some other things.

Like how leaving the country is likely to subject you tto taxes for another country's healthcare, so be sure to pick carefully.

January 15, 2012 at 5:27 p.m.
Plato said...

The law only applies to companies with 50 or more employees. I would love to see a owner of a business with 50 employees try to manipulate or hide payroll. They would not only get caught very quickly, they would be prosecuted vigorously by the IRS due to the size of the crime.

I wonder who sits around and dreams up these fictional events that will never come to pass just to have something to complain about?

January 15, 2012 at 9:57 p.m.
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