ObamaCare may spur more underground businesses

ObamaCare may spur more underground businesses

January 15th, 2012 in Opinion Free Press

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.