Most of the employees in my hometown make minimum wage over the table, and then get paid in cash under the table. I know this because many of them are my friends, and I am an accountant, and they talk to me about it. On paper, they make $350 a week. Then their bosses hand them $500-$2000 per week in cash. It’s not taxed AND the employees still qualify for federal benefits, since it looks like they are living below the poverty line. Their children get free lunch at school, the get “Earned Income Credit” on their taxes, and qualify for HUD loans. All the while paying for everything in cash so it’s hard to trace.
This is why federal programs don’t work – EVERYONE tries to game the system, and it’s impossible to enforce the rules. You’d have to hire millions of accountants to find all of the places people hide money.
And honestly, I don’t blame them. The less taxes we pay, the better. I even have bartering arrangements worked out with some people to avoid taxes.
