Secret Money and Underground Economy ● A group of clandestine transactions that create (financial) value, but are conducted with the intent of escaping something-taxes, bribes, gov. regulations ● Underground Economy exists for four reasons: ○ To escape taxation ■ Can be more that half in certain countries ○ To escape regulation ■ Perceive hindrance that affect business flow: prices, wages, returns of capital, and exchange rates ○ To escape prohibition ■ Narcotics, smuggling, gambling, prostitution ○ To escape further corruption ■ Bribes, corruption, public procurement, customs clearance, and zoning ordinances. Vehicles and Demands for Secret Money ● Vehicles ○ Domestic Currency ○ Foreign Currency ○ Precious metals ○ Stamps and Collectibles ○ Bearer instruments ■ Cashier's’ check, Money order ○ Bearer bonds ■ Corporate bonds/stock, government bonds ● Demands ○ Bribery and corruption ○ Capital Flight ■ Incentive for people with jail time to escape ○ Fraud ○ Undercover activities ○ Insider trading ○ Money laundering ○ Smuggling/black markets ○ Tax evasion Off-Shore Havens ● A tax haven is a country whose laws, regulations, traditions, and treaty arrangements make it possible for a person to reduce overall tax burdens.
- Fall '16
- Steve Evens
- Cheque, Tax haven, Tax avoidance and tax evasion