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Posts Tagged ‘Economy’

Economy Daunting Many, Especially Those Who Lack Clean Criminal Record

North America has only recently come out of one of the worst recessions within living memory. Economic growth is slow but visible and companies are hiring again. Yet many people are finding that looking for employment remains a daunting task. It is as if the positive statistics regarding jobs created every month are masking an underlying reality of a more competitive job market.

The answer to this apparent contradiction clearly lies in a principle that is often manifested in tough economic times and other situations when fewer job openings arise: when employers need less staff, they can afford to set higher standards for hiring. A subsidiary effect of this is that when a company downsizes, the sudden lack of staff allows them to re-think their staffing model according to principles which might be more efficient for the company and which will be implemented when hiring during post-recession restructuring. An illustrative example is the changes that the militaries of many countries have made during the course of the 20th century, for instance the French Foreign Legion. During France’s colonial period, the Legion was like a second French army; it served in the hostile North African territories and, needing cannon fodder, took virtually any able-bodied man regardless of past history. After France lost its colonies, the Legion was moved to metropolitan France; since then, it has been more closely integrated into the French army and, while still numbering about 7700 men, can afford to turn away many of the applicants who flock to its recruitment centres every year. Today, factors ranging from a serious criminal past to bad teeth can eliminate a potential recruit. In all, there are about 8 applicants for each opening in the Legion.

What follows are some examples of the difficulties facing the post-recession job seeker in today’s North American employment sector.

Part-time and contract work

The truth is that there are many jobs being posted, but those looking for a permanent position may have a hard time finding one among the different part-time and contract positions available. This is one of the most brutal realities of the post-recession market: many employers are finding it more efficient to outsource part of their staff to contractors for specific projects rather than hire full-time employees.

When a job is not what is advertised

One of the more illicit current practices is for employers who need cheap labour to take advantage of the desperate. Advertisements put out by some companies may include promises of openings in different fields (administrative, HR, sales etc); when a prospective candidate answers the ad, he or she will be readily invited for an interview, at which it will transpire that the employer is looking to fill a narrower range of positions, which in extreme cases might mean they are hiring only poorly-paid sales representatives for an unpopular product line. Or a company may lure job seekers with positive-sounding adverts, while omitting less attractive aspects of the position, such as a commission-based salary. Others may present participation in a pyramid scheme as a legitimate job opening. In effect, these companies are banking on the fact that many people are desperate to leave the ranks of the unemployed and might be more willing to take up such positions.

Criminal record checks

Or, as in the example of the Foreign Legion, a company may simply find that it can afford to raise its hiring standards. One way in which this is being increasingly manifested today is the requirement for employees to present a criminal record check, which can spell trouble for those candidates who have a conviction to their name. More and more employers are demanding a clean criminal record from prospective candidates. This was always a barrier to some jobs, but a clean criminal record used to be more of a requirement for the public sector, in security or law enforcement-type positions, and in other concrete areas. Nowadays, however, more and more companies are screening potential employees in this regard, including existing employees who are about to be promoted; for many, a long-forgotten petty conviction will mean fewer job opportunities as more companies demand a clean criminal record. The good news is that some employers, such as IBM, judge employees on a case-by-case basis and may accept a qualified candidate who has a minor conviction. Still, it is much safer to get a pardon, which will guarantee a clean criminal record despite the conviction, if local law allows this. For example, in Canada, anyone may apply for a criminal pardon from the Parole Board of Canada 3 to 10 years after completing their sentence; when this is granted, the crime will not be visible to prospective employers.

Ned Lecic is a writer both professionally and in his leisure time. He works for a Canadian pardons agency.

Article Source:
http://EzineArticles.com/?expert=Ned_Lecic

Question by Shannon S: How do I apply for a time-cut in Texas?
I have been on parole for 13 years and would like to get a time-cut. Can anyone tell me where to begin searching or how to go about it? I do not have the money to hire a lawyer nor do I really want to try for a pardon. The statistics on pardons are not good. I have came out of prison and made something of myself. I am a single mother, with a new home I purchased, a nice vehicle and a wonderful job that I have been at for over 6 years. I am currently on quarterly reporting, but I think I have more then proved myself to the parole board and society. I am a productive citizen, pay my taxes, volunteer as often as I can and I feel I should be given a second chance.
Thank you so much for responding. I do have the paperwork to apply for a pardon this will be my 4th time to do so. Maybe one day they will be tired of seeing my name. I rec’d a life sentence and there is no end for parole with those. I spend 7 years in prison and have been home 13 years. I have only had my current PO for a month, this is probably my 7th PO since being released. Most all of the POs I have had in the past do give me a hard time, because I’m doing so well. They really change their tune with me when I have to give them a paycheck stub and they realize I make more money then them. So asking my PO for any help is out of the question. I will continue to move forward and see what happens. Thanks again for responding and I appreciate all the encouragement. I always say if I can save one person from getting messed up with the wrong crowd like I did, then I have done something wonderful.

Best answer:

Answer by Diva-Ish
I just want to give you encouragement and good luck.
Great example of someone who worked to get out of the consequences you got yourself into when you were younger.

did you talk to your parole officer about it? is it something you can bring up to the parole officer and have the PO help you? If not, he or she can at least point you in the right direction.

how much longer is your parole?

Again Kudos to you and keep trying — there is a reason for you being a success story. Keep sharing it and keep giving hope to those around you.

May hope spring eternal for you.

Add your own answer in the comments!
Here is the latest Oklahoma news from The Associated Press
OKLAHOMA CITY (AP) – Oklahoma County District Attorney David Prater is accusing the Pardon and Parole Board of violating the state's Open Meeting Act. Prater delivered a nine-page letter today to the board's executive director, Terry Jenks. It alleges …
Read more on KOAM-TV

Troy Davis Finality Over Fairness UPDATE – STAY of execution issued on 10-24! The 11th Circuit Court of Appeals issued the stay. The Georgia Board of Pardons and Paroles denied clemency for Troy Anthony Davis shortly before 5 pm on Friday, September 12. They did so despite overwhelming doubts of Davis’ guilt – and after stating last year that they would “not allow an execution to proceed in this State unless and until its members are convinced that there is no doubt as to the guilt of the accused.” On September 23, The US Supreme Court stayed Troy Davis’ execution “pending the disposition of [his] petition for a writ of certiorari.” On October 14, the Court decided not to accept his petition.
Video Rating: 5 / 5

The Blessings of the Black Economy

Some call it the “unofficial” or “informal” economy, others call it the “grey economy” but the old name fits it best: the “black economy”. In the USA “black” means “profitable, healthy” and this is what the black economy is. Macedonia should count its blessings for having had a black economy so strong and thriving to see it through the transition. If Macedonia had to rely only on its official economy it would have gone bankrupt long ago.

The black economy is made up of two constituent activities:

Legal activities that are not reported to the tax authorities and the income from which goes untaxed and unreported. For instance: it is not illegal to clean someone’s house, to feed people or to drive them. It is, however, illegal to hide the income generated by these activities and not to pay tax on it. In most countries of the world, this is a criminal offence, punishable by years in prison.

Illegal activities which, needless to say, are also not reported to the state (and, therefore, not taxed).

These two types of activities together are thought to comprise between 15% (USA, Germany) to 60% (Russia) of the economic activity (as measured by the GDP), depending on the country. It would probably be an underestimate to say that 40% of the GDP in Macedonia is “black”. This equals 1.2 billion USD per annum. The money generated by these activities is largely held in foreign exchange outside the banking system or smuggled abroad (even through the local banking system). Experience in other countries shows that circa 15% of the money “floats” in the recipient country and is used to finance consumption. This should translate to 1 billion free floating dollars in the hands of the 2 million citizens of Macedonia. Billions are transferred to the outside world (mostly to finance additional transactions, some of it to be saved in foreign banks away from the long hand of the state). A trickle of money comes back and is “laundered” through the opening of small legal businesses.

These are excellent news for Macedonia. It means that when the macro-economic, geopolitical and (especially) the micro-economic climates will change – billions of USD will flow back to Macedonia. People will bring their money back to open businesses, to support family members and just to consume it. It all depends on the mood and on the atmosphere and on how much these people feel that they can rely on the political stability and rational management. Such enormous flows of capital happened before: in Argentina after the Generals and their corrupt regime were ousted by civilians, in Israel when the peace process started and in Mexico following the signature of NAFTA, to mention but three cases. These reserves can be lured back and transform the economy.

But the black economy has many more important functions.

The black economy is a cash economy. It is liquid and fast. It increases the velocity of money. It injects much needed foreign exchange to the economy and inadvertently increases the effective money supply and the resulting money aggregates. In this sense, it defies the dictates of “we know better” institutions such as the IMF. It fosters economic activity and employs people. It encourages labour mobility and international trade. Black economy, in short, is very positive. With the exception of illegal activities, it does everything that the official economy does – and, usually, more efficiently.

So, what is morally wrong with the black economy? The answer, in brief: it is exploitative. Other parts of the economy, which are not hidden (though would have liked to be), are penalized for their visibility. They pay taxes. Workers in a factory owned by the state or in the government service cannot avoid paying taxes. The money that the state collects from them is invested, for instance, in infrastructure (roads, phones, electricity) or used to pay for public services (education, defence, policing). The operators of the black economy enjoy these services without paying for them, without bearing the costs and worse: while others bear the costs. These encourages them, in theory to use these resources less efficiently.

And all this might be true in a highly efficient, almost ideal market economy. The emphasis is on the word “market”. Unfortunately, we all live in societies which are regulated by bureaucracies which are controlled (in theory, rarely in practice) by politicians. These elites have a tendency to misuse and to abuse resources and to allocate them in an inefficient manner. Even economic theory admits that any dollar left in the hands of the private sector is much more efficiently used than the same dollar in the hands of the most honest and well meaning and well planning civil servant. Governments all over the world distort economic decisions and misallocate scarce economic resources.

Thus, if the goals are to encourage employment and economic growth – the black economy should be welcomed. This is precisely what it does and, by definition, it does so more efficiently than the government. The less tax dollars a government has – the less damage it does. This is an opinion shares by most economists in the world today. Lower tax rates are an admission of this fact and a legalization of parts of the black economy.

The black economy is especially important in times of economic hardships. Countries in transition are a private case of emerging economies which are a private case of developing countries which used to be called (in less politically correct times) “Third World Countries”. They suffer from all manner of acute economic illnesses. They lost their export markets, they are technologically backward, their unemployment skyrockets, their plant and machinery are dilapidated, their infrastructure decrepit and dysfunctional, they are lethally illiquid, they become immoral societies (obligations not honoured, crime flourishes), their trade deficits and budget deficits balloon and they are conditioned to be dependent on handouts and dictates from various international financial institutions and donor countries.

Read this list again: isn’t the black economy a perfect solution until the dust settles?

It enhances exports (and competitiveness through imports), it encourages technology transfers, it employs people, it invests in legitimate businesses (or is practised by them), it adds to the wealth of the nation (black marketeers are big spenders, good consumers and build real estate), it injects liquidity to an otherwise dehydrated market. Mercifully, the black economy is out of the reach of zealous missionaries such as the IMF. It goes its own way, unnoticed, unreported, unbeknownst, untamed. It doesn’t pay attention to money supply targets (it is much bigger than the official money supply figure), or to macroeconomic stability goals. It plods on: doing business and helping the country to survive the double scourges of transition and Western piousness and patronizing. As long as it is there, Macedonia has a real safety net. The government is advised to turn a blind eye to it for it is a blessing in disguise.

There is one sure medicine: eliminate the population and both unemployment and inflation will be eliminated. Without the black economy, the population of Macedonia would not have survived. This lesson must be remembered as the government prepares to crack down on the only sector of the economy which is still alive and kicking.

Operational Recommendations

The implementation of these recommendations and reforms should be obliged to be GRADUAL. The informal economy is an important pressure valve for the release of social pressures, it ameliorates the social costs inherent to the period of transition and it constitutes an important part of the private sector.

As we said in the body of our report, these are the reasons for the existence of an informal economy and they should be obliged to all be tackled:

High taxation level (in Macedonia, high payroll taxes)

Onerous labour market regulations

Red tape and bureaucracy (which often leads to corruption)

Complexity and unpredictability of the tax system

Reporting Requirements and Transparency

All banks should be obliged to report foreign exchange transactions of more than 10,000 DM (whether in one transaction or cumulatively by the same legal entity). The daily report should be submitted to the Central Bank. In extreme cases, the transactions should be investigated.

All the ZPP account numbers of all the firms in Macedonia should be publicly available through the Internet and in printed form.

Firms should be obliged by law to make a list of all their bank accounts available to the ZPP, to the courts and to plaintiffs in lawsuits.

All citizens should be obliged to file annual, personal tax returns (universal tax returns, like in the USA). This way, discrepancies between personal tax returns and other information can lead to investigations and discoveries of tax evasion and criminal activities.

All citizens should be obliged to file bi-annual declarations of personal wealth and assets (including real estate, vehicles, movables, inventory of business owned or controlled by the individual, financial assets, income from all sources, shares in companies, etc.)

All retail outlets and places of business should be required to install – over a period of 3 years – cash registers with “fiscal brains”. These are cash registers with an embedded chip. The chips are built to save a trail (detailed list) of all the transactions in the place of business. Tax inspectors can pick the chip at random, download its contents to the tax computers and use it to issue tax assessments. The information thus gathered can also be crossed with and compared to information from other sources (see: “Databases and Information Gathering”). This can be done only after the full implementation of the recommendations in the section titled “Databases and Information Gathering”. I do not regard it as an effective measure. While it increases business costs – it is not likely to prevent cash or otherwise unreported transactions.

All taxis should be equipped with taximeters, which include a printer. This should be a licencing condition.

Industrial norms (for instance, the amount of sugar needed to manufacture a weight unit of chocolate, or juice) should be revamped. Norms should NOT be determined according to statements provided by the factory – but by a panel of experts. Each norm should be signed by three people, of which at least one is an expert engineer or another expert in the relevant field. Thought should be dedicated to the possibility of employing independent laboratories to determine norms and supervise them.

Payments in wholesale markets should be done through a ZPP counter or branch in the wholesale market itself. Release of the goods and exiting the physical location of the wholesale market should be allowed only against presentation of a ZPP payment slip.

Reduction of Cash Transactions

Cash transactions are the lifeblood of the informal economy. Their reduction and minimization is absolutely essential in the effort to contain it. One way of doing it is by issuing ZPP payment (debit) cards to businesses, firm and professionals. Use of the payment cards should be mandatory in certain business-to-business transactions.

All exchange offices should be obliged to issue receipt for every cash transaction above 100 DM and to report to the Central Bank all transactions above 1000 DM. Suspicious transactions (for instance, transactions which exceed the financial wherewithal of the client involved) should be duly investigated.

The government can reduce payroll taxes if the salary is not paid in cash (for instance, by a transfer to the bank account of the employee). The difference between payroll taxes collected on cash salaries and lower payroll taxes collected on noncash salaries – should be recovered by imposing a levy on all cash withdrawals from banks. The banks can withhold the tax and transfer it to the state monthly.

Currently, checks issued to account-holders by banks are virtually guaranteed by the issuing banks. This transforms checks into a kind of cash and checks are used as cash in the economy. To prevent this situation, it is recommended that all checks will be payable to the beneficiary only. The account-holder will be obliged to furnish the bank with a monthly list of checks he or she issued and their details (to whom, date, etc.). Checks should be valid for 5 working days only.

An obligation can be imposed to oblige businesses to effect payments only through their accounts (from account to account) or using their debit cards. Cash withdrawals should be subject to a withholding tax deducted by the bank. The same withholding tax should be applied to credits given against cash balances or to savings houses (stedilnicas). Alternatively, stedilnicas should also be obliged to deduct, collect and transfer the cash withdrawal withholding tax.

In the extreme and if all other measures fail after a reasonable period of time, all foreign trade related payments should be conducted through the Central Bank. But this is really a highly irregular, emergency measure, which I do not recommend at this stage.

The interest paid on cash balances and savings accounts in the banks should be increased (starting with bank reserves and deposits in the central bank).

The issuance of checkbook should be made easy and convenient. Every branch should issue checkbooks. All the banks and the post office should respect and accept each other’s checks.

A Real Time Gross Settlement System should be established to minimize float and facilitate interbank transfers.

Government Tenders

Firms competing for government tenders should be obliged to acquire a certificate from the tax authorities that they owe no back-taxes. Otherwise, they should be barred from bidding in government tenders and RFPs (Requests for Proposals).

Databases and Information Gathering

Estimating the informal economy should be a priority objective of the Bureau of Statistics, which should devote considerable resources to this effort. In doing so, the Bureau of Statistics should coordinate closely with a wide variety of relevant ministries and committees that oversee various sectors of the economy.

All registrars should be computerized: land, real estate, motor vehicles, share ownership, companies registration, tax filings, import and export related documentation (customs), VAT, permits and licences, records of flights abroad, ownership of mobile phones and so on. The tax authorities and the Public Revenue Office (PRO) should have unrestricted access to ALL the registers of all the registrars. Thus, they should be able to find tax evasion easily (ask for sources of wealth- how did you build this house and buy a new car if you are earning 500 DM monthly according to your tax return?)

The PRO should have complete access to the computers of the ZPP and to all its computerized and non-computerized records.

The computer system should constantly compare VAT records and records and statements related to other taxes in order to find discrepancies between them.

Gradually, submissions of financial statements, tax returns and wealth declarations should be computerized and done even on a monthly basis (for instance, VAT statements).

A system of informants and informant rewards should be established, including anonymous phone calls. Up to 10% of the intake or seizure value related to the information provided by the informant should go to the informant.

Law Enforcement

Tax inspectors and customs officials should receive police powers and much higher salaries (including a percentage of tax revenues). The salaries of all tax inspectors – regardless of their original place of employment – should be equalized (of course, taking into consideration tenure, education, rank, etc.).

Judges should be trained and educated in matters pertaining to the informal economy. Special courts for taxes, for instance, are a good idea (see recommendation below). Judges have to be trained in tax laws and the state tax authorities should provide BINDING opinions to entrepreneurs, businessmen and investors regarding the tax implications of their decisions and actions.

It is recommended to assign tax inspectors to the public prosecutors’ office to work as teams on complex or big cases.

To establish an independent Financial and Tax Police with representatives from all relevant ministries but under the exclusive jurisdiction of the PRO. The remit of this Police should include all matters financial (including foreign exchange transactions, property and real estate transactions, payroll issues, etc.)

Hiring and firing procedures in all the branches of the tax administration should be simplified. The number of administrative posts should be reduced and the number of tax inspectors and field agents increased.

Tax arrears and especially the interest accruing thereof should be the first priority of the ZPP, before all other payments.

All manufacturers and sellers of food products (including soft drinks, sweetmeats and candy, meat products, snacks) should purchase a licence from the state and be subjected to periodic and rigorous inspections.

All contracts between firms should be registered in the courts and stamped to become valid. Contracts thus evidenced should be accompanied by the registration documents (registrar extract) of the contracting parties. Many “firms” doing business in Macedonia are not even legally registered.

Reforms and Amnesty

A special inter-ministerial committee with MINISTER-MEMBERS and headed by the PM should be established. Its roles: to reduce bureaucracy, to suggest appropriate new legislation and to investigate corruption.

Bureaucracy should be pared down drastically. The more permits, licences, tolls, fees and documents needed – the more corruption. Less power to state officials means less corruption. The One Stop Shop concept should be implemented everywhere.

A general amnesty should be declared. Citizens declaring their illegal wealth should be pardoned BY LAW and either not taxed or taxed at a low rate once and forever on the hitherto undeclared wealth.

The Tax Code

To impose a VAT system. VAT is one the best instruments against the informal economy because it tracks the production process throughout a chain of value added suppliers and manufacturers.

The Tax code needs to be simplified. Emphasis should be placed on VAT, consumption taxes, customs and excise taxes, fees and duties. To restore progressivity, the government should directly compensate the poor for the excess relative burden.

After revising the tax code in a major way, the government should declare a moratorium on any further changes for at least four years.

The self-employed and people whose main employment is directorship in companies should be given the choice between paying a fixed % of the market value of their assets (including financial assets) or income tax.

All property rental contracts should be registered with the courts. Lack of registration in the courts and payment of a stamp tax should render the contract invalid. The courts should be allowed to evidence and stamp a contract only after it carries the stamp of the Public Revenue Office (PRO). The PRO should register the contract and issue an immediate tax assessment. Contracts, which are for less than 75% of the market prices, should be subject to tax assessment at market prices. Market prices should be determined as the moving average of the last 100 rental contracts from the same region registered by the PRO.

Filing of tax returns – including for the self-employed – should be only with the PRO and not with any other body (such as the ZPP).

Legal Issues

The burden of proof in tax court cases should shift from the tax authorities to the person or firm assessed.

Special tax courts should be established within the existing courts. They should be staffed by specifically trained judges. Their decisions should be appealed to the Supreme Court. They should render their decisions within 180 days. All other juridical and appeal instances should be cancelled – except for an appeal instance within the PRO. Thus, the process of tax collection should be greatly simplified. A tax assessment should be issued by the tax authorities, appealed internally (within the PRO), taken to a tax court session (by a plaintiff) and, finally, appealed to the Supreme Court (in very rare cases).

The law should allow for greater fines, prison terms and for the speedier and longer closure of delinquent businesses.

Seizure and sale procedures should be specified in all the tax laws and not merely by way of reference to the Income Tax Law. Enforcement provisions should be incorporated in all the tax laws.

To amend the Law on Tax Administration, the Law on Personal Income Tax and the Law on Profits Tax as per the recommendations of the IRS experts (1997-9).

Customs and Duties

Ideally, the customs service should be put under foreign contract managers. If this is politically too sensitive, the customs personnel should be entitled to receive a percentage of customs and duties revenues, on a departmental incentive basis. In any case, the customs should be subjected to outside inspection by expert inspectors who should be rewarded with a percentage of the corruption and lost revenues that they expose.

In the case of imports or payments abroad, invoices, which include a price of more than 5% above the list price of a product, should be rejected and assessment for the purposes of paying customs duties and other taxes should be issued at the list price.

In the case of exports or payments from abroad, invoices which include a discount of more than 25% on the list price of a product should be rejected and assessment for the purposes of paying customs duties and other taxes should be issued at the list price.

The numbers of tax inspectors should be substantially increased and their pay considerably enhanced. A departmental incentive system should be instituted involving a percentage of the intake (monetary fines levied, goods confiscated, etc.)

The computerized database system (see “Databases and Information Gathering”) should be used to compare imports of raw materials for the purposes of re-export and actual exports (using invoices and customs declarations). Where there are disparities and discrepancies, severe and immediate penal actions should be taken. Anti-dumping levies and measures, fines and criminal charges should be adopted against exporters colluding with importers in hiding imported goods or reducing their value.

Often final products are imported and declared to the customs as raw materials (to minimize customs duties paid). Later these raw materials are either sold outright in the domestic or international markets or bartered for finished products (for example: paints and lacquers against furniture or sugar against chocolate). This should be a major focus of the fight against the informal economy. I follow with an analysis of two products, which are often abused in this manner.

I study two examples (white sugar and cooking oil) though virtually all raw materials and foods are subject to the aforementioned abuse.

White Sugar is often imported as brown sugar. One way to prevent this is to place sugar on the list of LB (import licence required) list, to limit the effective period of each licence issued, to connect each transaction of imported brown sugar to a transaction of export, to apply the world price of sugar to customs duties, to demand payment of customs duties in the first customs terminal, to demand a forwarder’s as well as an importer’s guarantee and to require a certificate of origin. The same goes for Cooking Oil (which – when it is imported packaged – is often declared as some other goods).

All payments to the customs should be made only through the ZPP. Customs and tax inspectors should inspect these receipts periodically.

All goods should be kept in the customs terminal until full payment of the customs duties, as evidenced by a ZPP receipt, is effected.

Public Campaign

The government should embark on a massive Public Relations and Information campaign. The citizens should be made to understand what is a budget, how the taxes are collected, how they are used. They should begin to view tax evaders as criminals. “He who does not pay his taxes – is stealing from you and from your children”, “Why should YOU pay for HIM?” “If we all did not pay taxes- there would be no roads, bridges, schools, or hospitals” (using video to show disappearing roads, bridges, suffering patients and students without classes), “Our country is a partnership – and the tax-evader is stealing from the till (kasa)” and so on.

The phrase “Gray Economy” should be replaced by the more accurate phrases “Black Economy” or “Criminal Economy”.

Sam Vaknin is the author of “Malignant Self Love – Narcissism Revisited” and “After the Rain – How the West Lost the East”. He is a columnist in “Central Europe Review”, United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com

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The Blessings of the Black Economy

Sam Vaknin, Ph.D.

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The Blessings of the Black Economy

Some call it the "unofficial" or "informal" economy, others call it the "grey economy" but the old name fits it best: the "black economy". In the USA "black" means "profitable, healthy" and this is what the black economy is. Macedonia should count its blessings for having had a black economy so strong and thriving to see it through the transition. If Macedonia had to rely only on its official economy it would have gone bankrupt long ago.

The black economy is made up of two constituent activities:

  • Legal activities that are not reported to the tax authorities and the income from which goes untaxed and unreported. For instance: it is not illegal to clean someone's house, to feed people or to drive them. It is, however, illegal to hide the income generated by these activities and not to pay tax on it. In most countries of the world, this is a criminal offence, punishable by years in prison.
  • Illegal activities which, needless to say, are also not reported to the state (and, therefore, not taxed).

These two types of activities together are thought to comprise between 15% (USA, Germany) to 60% (Russia) of the economic activity (as measured by the GDP), depending on the country. It would probably be an underestimate to say that 40% of the GDP in Macedonia is "black". This equals 1.2 billion USD per annum. The money generated by these activities is largely held in foreign exchange outside the banking system or smuggled abroad (even through the local banking system). Experience in other countries shows that circa 15% of the money "floats" in the recipient country and is used to finance consumption. This should translate to 1 billion free floating dollars in the hands of the 2 million citizens of Macedonia. Billions are transferred to the outside world (mostly to finance additional transactions, some of it to be saved in foreign banks away from the long hand of the state). A trickle of money comes back and is "laundered" through the opening of small legal businesses.

These are excellent news for Macedonia. It means that when the macro-economic, geopolitical and (especially) the micro-economic climates will change - billions of USD will flow back to Macedonia. People will bring their money back to open businesses, to support family members and just to consume it. It all depends on the mood and on the atmosphere and on how much these people feel that they can rely on the political stability and rational management. Such enormous flows of capital happened before: in Argentina after the Generals and their corrupt regime were ousted by civilians, in Israel when the peace process started and in Mexico following the signature of NAFTA, to mention but three cases. These reserves can be lured back and transform the economy.

But the black economy has many more important functions.

The black economy is a cash economy. It is liquid and fast. It increases the velocity of money. It injects much needed foreign exchange to the economy and inadvertently increases the effective money supply and the resulting money aggregates. In this sense, it defies the dictates of "we know better" institutions such as the IMF. It fosters economic activity and employs people. It encourages labour mobility and international trade. Black economy, in short, is very positive. With the exception of illegal activities, it does everything that the official economy does - and, usually, more efficiently.

So, what is morally wrong with the black economy? The answer, in brief: it is exploitative. Other parts of the economy, which are not hidden (though would have liked to be), are penalized for their visibility. They pay taxes. Workers in a factory owned by the state or in the government service cannot avoid paying taxes. The money that the state collects from them is invested, for instance, in infrastructure (roads, phones, electricity) or used to pay for public services (education, defence, policing). The operators of the black economy enjoy these services without paying for them, without bearing the costs and worse: while others bear the costs. These encourages them, in theory to use these resources less efficiently.

And all this might be true in a highly efficient, almost ideal market economy. The emphasis is on the word "market". Unfortunately, we all live in societies which are regulated by bureaucracies which are controlled (in theory, rarely in practice) by politicians. These elites have a tendency to misuse and to abuse resources and to allocate them in an inefficient manner. Even economic theory admits that any dollar left in the hands of the private sector is much more efficiently used than the same dollar in the hands of the most honest and well meaning and well planning civil servant. Governments all over the world distort economic decisions and misallocate scarce economic resources.

Thus, if the goals are to encourage employment and economic growth - the black economy should be welcomed. This is precisely what it does and, by definition, it does so more efficiently than the government. The less tax dollars a government has - the less damage it does. This is an opinion shares by most economists in the world today. Lower tax rates are an admission of this fact and a legalization of parts of the black economy.

The black economy is especially important in times of economic hardships. Countries in transition are a private case of emerging economies which are a private case of developing countries which used to be called (in less politically correct times) "Third World Countries". They suffer from all manner of acute economic illnesses. They lost their export markets, they are technologically backward, their unemployment skyrockets, their plant and machinery are dilapidated, their infrastructure decrepit and dysfunctional, they are lethally illiquid, they become immoral societies (obligations not honoured, crime flourishes), their trade deficits and budget deficits balloon and they are conditioned to be dependent on handouts and dictates from various international financial institutions and donor countries.

Read this list again: isn't the black economy a perfect solution until the dust settles?

It enhances exports (and competitiveness through imports), it encourages technology transfers, it employs people, it invests in legitimate businesses (or is practised by them), it adds to the wealth of the nation (black marketeers are big spenders, good consumers and build real estate), it injects liquidity to an otherwise dehydrated market. Mercifully, the black economy is out of the reach of zealous missionaries such as the IMF. It goes its own way, unnoticed, unreported, unbeknownst, untamed. It doesn't pay attention to money supply targets (it is much bigger than the official money supply figure), or to macroeconomic stability goals. It plods on: doing business and helping the country to survive the double scourges of transition and Western piousness and patronizing. As long as it is there, Macedonia has a real safety net. The government is advised to turn a blind eye to it for it is a blessing in disguise.

There is one sure medicine: eliminate the population and both unemployment and inflation will be eliminated. Without the black economy, the population of Macedonia would not have survived. This lesson must be remembered as the government prepares to crack down on the only sector of the economy which is still alive and kicking.

Operational Recommendations

The implementation of these recommendations and reforms should be obliged to be GRADUAL. The informal economy is an important pressure valve for the release of social pressures, it ameliorates the social costs inherent to the period of transition and it constitutes an important part of the private sector.

As we said in the body of our report, these are the reasons for the existence of an informal economy and they should be obliged to all be tackled:

  • High taxation level (in Macedonia, high payroll taxes)
  • Onerous labour market regulations
  • Red tape and bureaucracy (which often leads to corruption)
  • Complexity and unpredictability of the tax system

Reporting Requirements and Transparency

  • All banks should be obliged to report foreign exchange transactions of more than 10,000 DM (whether in one transaction or cumulatively by the same legal entity). The daily report should be submitted to the Central Bank. In extreme cases, the transactions should be investigated.
  • All the ZPP account numbers of all the firms in Macedonia should be publicly available through the Internet and in printed form.
  • Firms should be obliged by law to make a list of all their bank accounts available to the ZPP, to the courts and to plaintiffs in lawsuits.
  • All citizens should be obliged to file annual, personal tax returns (universal tax returns, like in the USA). This way, discrepancies between personal tax returns and other information can lead to investigations and discoveries of tax evasion and criminal activities.
  • All citizens should be obliged to file bi-annual declarations of personal wealth and assets (including real estate, vehicles, movables, inventory of business owned or controlled by the individual, financial assets, income from all sources, shares in companies, etc.)
  • All retail outlets and places of business should be required to install - over a period of 3 years - cash registers with "fiscal brains". These are cash registers with an embedded chip. The chips are built to save a trail (detailed list) of all the transactions in the place of business. Tax inspectors can pick the chip at random, download its contents to the tax computers and use it to issue tax assessments. The information thus gathered can also be crossed with and compared to information from other sources (see: "Databases and Information Gathering"). This can be done only after the full implementation of the recommendations in the section titled "Databases and Information Gathering". I do not regard it as an effective measure. While it increases business costs - it is not likely to prevent cash or otherwise unreported transactions.
  • All taxis should be equipped with taximeters, which include a printer. This should be a licencing condition.
  • Industrial norms (for instance, the amount of sugar needed to manufacture a weight unit of chocolate, or juice) should be revamped. Norms should NOT be determined according to statements provided by the factory - but by a panel of experts. Each norm should be signed by three people, of which at least one is an expert engineer or another expert in the relevant field. Thought should be dedicated to the possibility of employing independent laboratories to determine norms and supervise them.
  • Payments in wholesale markets should be done through a ZPP counter or branch in the wholesale market itself. Release of the goods and exiting the physical location of the wholesale market should be allowed only against presentation of a ZPP payment slip.

Reduction of Cash Transactions

  • Cash transactions are the lifeblood of the informal economy. Their reduction and minimization is absolutely essential in the effort to contain it. One way of doing it is by issuing ZPP payment (debit) cards to businesses, firm and professionals. Use of the payment cards should be mandatory in certain business-to-business transactions.
  • All exchange offices should be obliged to issue receipt for every cash transaction above 100 DM and to report to the Central Bank all transactions above 1000 DM. Suspicious transactions (for instance, transactions which exceed the financial wherewithal of the client involved) should be duly investigated.
  • The government can reduce payroll taxes if the salary is not paid in cash (for instance, by a transfer to the bank account of the employee). The difference between payroll taxes collected on cash salaries and lower payroll taxes collected on noncash salaries - should be recovered by imposing a levy on all cash withdrawals from banks. The banks can withhold the tax and transfer it to the state monthly.
  • Currently, checks issued to account-holders by banks are virtually guaranteed by the issuing banks. This transforms checks into a kind of cash and checks are used as cash in the economy. To prevent this situation, it is recommended that all checks will be payable to the beneficiary only. The account-holder will be obliged to furnish the bank with a monthly list of checks he or she issued and their details (to whom, date, etc.). Checks should be valid for 5 working days only.
  • An obligation can be imposed to oblige businesses to effect payments only through their accounts (from account to account) or using their debit cards. Cash withdrawals should be subject to a withholding tax deducted by the bank. The same withholding tax should be applied to credits given against cash balances or to savings houses (stedilnicas). Alternatively, stedilnicas should also be obliged to deduct, collect and transfer the cash withdrawal withholding tax.
  • In the extreme and if all other measures fail after a reasonable period of time, all foreign trade related payments should be conducted through the Central Bank. But this is really a highly irregular, emergency measure, which I do not recommend at this stage.
  • The interest paid on cash balances and savings accounts in the banks should be increased (starting with bank reserves and deposits in the central bank).
  • The issuance of checkbook should be made easy and convenient. Every branch should issue checkbooks. All the banks and the post office should respect and accept each other's checks.
  • A Real Time Gross Settlement System should be established to minimize float and facilitate interbank transfers.

Government Tenders

  • Firms competing for government tenders should be obliged to acquire a certificate from the tax authorities that they owe no back-taxes. Otherwise, they should be barred from bidding in government tenders and RFPs (Requests for Proposals).

Databases and Information Gathering

  • Estimating the informal economy should be a priority objective of the Bureau of Statistics, which should devote considerable resources to this effort. In doing so, the Bureau of Statistics should coordinate closely with a wide variety of relevant ministries and committees that oversee various sectors of the economy.
  • All registrars should be computerized: land, real estate, motor vehicles, share ownership, companies registration, tax filings, import and export related documentation (customs), VAT, permits and licences, records of flights abroad, ownership of mobile phones and so on. The tax authorities and the Public Revenue Office (PRO) should have unrestricted access to ALL the registers of all the registrars. Thus, they should be able to find tax evasion easily (ask for sources of wealth- how did you build this house and buy a new car if you are earning 500 DM monthly according to your tax return?)
  • The PRO should have complete access to the computers of the ZPP and to all its computerized and non-computerized records.
  • The computer system should constantly compare VAT records and records and statements related to other taxes in order to find discrepancies between them.
  • Gradually, submissions of financial statements, tax returns and wealth declarations should be computerized and done even on a monthly basis (for instance, VAT statements).
  • A system of informants and informant rewards should be established, including anonymous phone calls. Up to 10% of the intake or seizure value related to the information provided by the informant should go to the informant.

Law Enforcement

  • Tax inspectors and customs officials should receive police powers and much higher salaries (including a percentage of tax revenues). The salaries of all tax inspectors - regardless of their original place of employment - should be equalized (of course, taking into consideration tenure, education, rank, etc.).
  • Judges should be trained and educated in matters pertaining to the informal economy. Special courts for taxes, for instance, are a good idea (see recommendation below). Judges have to be trained in tax laws and the state tax authorities should provide BINDING opinions to entrepreneurs, businessmen and investors regarding the tax implications of their decisions and actions.
  • It is recommended to assign tax inspectors to the public prosecutors' office to work as teams on complex or big cases.
  • To establish an independent Financial and Tax Police with representatives from all relevant ministries but under the exclusive jurisdiction of the PRO. The remit of this Police should include all matters financial (including foreign exchange transactions, property and real estate transactions, payroll issues, etc.)
  • Hiring and firing procedures in all the branches of the tax administration should be simplified. The number of administrative posts should be reduced and the number of tax inspectors and field agents increased.
  • Tax arrears and especially the interest accruing thereof should be the first priority of the ZPP, before all other payments.
  • All manufacturers and sellers of food products (including soft drinks, sweetmeats and candy, meat products, snacks) should purchase a licence from the state and be subjected to periodic and rigorous inspections.
  • All contracts between firms should be registered in the courts and stamped to become valid. Contracts thus evidenced should be accompanied by the registration documents (registrar extract) of the contracting parties. Many "firms" doing business in Macedonia are not even legally registered.

Reforms and Amnesty

  • A special inter-ministerial committee with MINISTER-MEMBERS and headed by the PM should be established. Its roles: to reduce bureaucracy, to suggest appropriate new legislation and to investigate corruption.
  • Bureaucracy should be pared down drastically. The more permits, licences, tolls, fees and documents needed - the more corruption. Less power to state officials means less corruption. The One Stop Shop concept should be implemented everywhere.
  • A general amnesty should be declared. Citizens declaring their illegal wealth should be pardoned BY LAW and either not taxed or taxed at a low rate once and forever on the hitherto undeclared wealth.

The Tax Code

  • To impose a VAT system. VAT is one the best instruments against the informal economy because it tracks the production process throughout a chain of value added suppliers and manufacturers.
  • The Tax code needs to be simplified. Emphasis should be placed on VAT, consumption taxes, customs and excise taxes, fees and duties. To restore progressivity, the government should directly compensate the poor for the excess relative burden.
  • After revising the tax code in a major way, the government should declare a moratorium on any further changes for at least four years.
  • The self-employed and people whose main employment is directorship in companies should be given the choice between paying a fixed % of the market value of their assets (including financial assets) or income tax.
  • All property rental contracts should be registered with the courts. Lack of registration in the courts and payment of a stamp tax should render the contract invalid. The courts should be allowed to evidence and stamp a contract only after it carries the stamp of the Public Revenue Office (PRO). The PRO should register the contract and issue an immediate tax assessment. Contracts, which are for less than 75% of the market prices, should be subject to tax assessment at market prices. Market prices should be determined as the moving average of the last 100 rental contracts from the same region registered by the PRO.
  • Filing of tax returns - including for the self-employed - should be only with the PRO and not with any other body (such as the ZPP).

Legal Issues

  • The burden of proof in tax court cases should shift from the tax authorities to the person or firm assessed.
  • Special tax courts should be established within the existing courts. They should be staffed by specifically trained judges. Their decisions should be appealed to the Supreme Court. They should render their decisions within 180 days. All other juridical and appeal instances should be cancelled - except for an appeal instance within the PRO. Thus, the process of tax collection should be greatly simplified. A tax assessment should be issued by the tax authorities, appealed internally (within the PRO), taken to a tax court session (by a plaintiff) and, finally, appealed to the Supreme Court (in very rare cases).
  • The law should allow for greater fines, prison terms and for the speedier and longer closure of delinquent businesses.
  • Seizure and sale procedures should be specified in all the tax laws and not merely by way of reference to the Income Tax Law. Enforcement provisions should be incorporated in all the tax laws.
  • To amend the Law on Tax Administration, the Law on Personal Income Tax and the Law on Profits Tax as per the recommendations of the IRS experts (1997-9).

Customs and Duties

  • Ideally, the customs service should be put under foreign contract managers. If this is politically too sensitive, the customs personnel should be entitled to receive a percentage of customs and duties revenues, on a departmental incentive basis. In any case, the customs should be subjected to outside inspection by expert inspectors who should be rewarded with a percentage of the corruption and lost revenues that they expose.
  • In the case of imports or payments abroad, invoices, which include a price of more than 5% above the list price of a product, should be rejected and assessment for the purposes of paying customs duties and other taxes should be issued at the list price.
  • In the case of exports or payments from abroad, invoices which include a discount of more than 25% on the list price of a product should be rejected and assessment for the purposes of paying customs duties and other taxes should be issued at the list price.
  • The numbers of tax inspectors should be substantially increased and their pay considerably enhanced. A departmental incentive system should be instituted involving a percentage of the intake (monetary fines levied, goods confiscated, etc.)
  • The computerized database system (see "Databases and Information Gathering") should be used to compare imports of raw materials for the purposes of re-export and actual exports (using invoices and customs declarations). Where there are disparities and discrepancies, severe and immediate penal actions should be taken. Anti-dumping levies and measures, fines and criminal charges should be adopted against exporters colluding with importers in hiding imported goods or reducing their value.
  • Often final products are imported and declared to the customs as raw materials (to minimize customs duties paid). Later these raw materials are either sold outright in the domestic or international markets or bartered for finished products (for example: paints and lacquers against furniture or sugar against chocolate). This should be a major focus of the fight against the informal economy. I follow with an analysis of two products, which are often abused in this manner.
  • I study two examples (white sugar and cooking oil) though virtually all raw materials and foods are subject to the aforementioned abuse.
  • White Sugar is often imported as brown sugar. One way to prevent this is to place sugar on the list of LB (import licence required) list, to limit the effective period of each licence issued, to connect each transaction of imported brown sugar to a transaction of export, to apply the world price of sugar to customs duties, to demand payment of customs duties in the first customs terminal, to demand a forwarder's as well as an importer's guarantee and to require a certificate of origin. The same goes for Cooking Oil (which - when it is imported packaged - is often declared as some other goods).
  • All payments to the customs should be made only through the ZPP. Customs and tax inspectors should inspect these receipts periodically.
  • All goods should be kept in the customs terminal until full payment of the customs duties, as evidenced by a ZPP receipt, is effected.

Public Campaign

  • The government should embark on a massive Public Relations and Information campaign. The citizens should be made to understand what is a budget, how the taxes are collected, how they are used. They should begin to view tax evaders as criminals. "He who does not pay his taxes - is stealing from you and from your children", "Why should YOU pay for HIM?" "If we all did not pay taxes- there would be no roads, bridges, schools, or hospitals" (using video to show disappearing roads, bridges, suffering patients and students without classes), "Our country is a partnership - and the tax-evader is stealing from the till (kasa)" and so on.
  • The phrase "Gray Economy" should be replaced by the more accurate phrases "Black Economy" or "Criminal Economy".

Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com




Hey boys, look where we are This town ain't big enough for the both of us So get ready to run This all goes to show just how little you really know About the way that we are I notice everything Like every single rumor That you spread today You're never gonna change Let's set this record straight I know all your dirty secrets That you kept from me This conversation's over Watch your step (Watch your step) This town can chew you up And spit you out So pardon me but you shouldn't be so proud Watch your step (Watch your step) This town can chew you up And spit you out So pardon me but you shouldn't be so proud You're all the same You think that everyone around you cares about what you think No one knows your name It's about that time take everyone you know and get as far across my states line as you possibly can I notice everything Like every single rumor That you spread today You're never gonna change Let's set this record straight I know all your dirty secrets That you kept from me This conversation's over Watch your step (Watch your step) This town can chew you up And spit you out So pardon me but you shouldn't be so proud Watch your step (Watch your step) This town can chew you up And spit you out So pardon me but you shouldn't be so proud Will they miss me when I'm gone? Will this time be for too long? Wait till then And see if time brings change Will they miss me when I'm gone? Will this time be for too long? Wait till then And see if time brings change (Watch your step ...
Video Rating: 5 / 5

Question by Enzo F: My dad came to USA as a legal resident. About 6 years later he got deported due to his mother passing away?
Before he came here. In the embassy they never asked him about his mother and gave him the residency to come to the US. When they found out she had passed away long before, he got deported. My brother and I are both citizens and my mom is a resident. He has been out of the country for 6 years. Is it possible for him to get a pardon already after all those years or can any of us put in the papers for him to come back to the US?

Best answer:

Answer by Rob
get an imigration lawyer.
do expect to visit dad while
u spends 10,000s$ $ on this.
sorry

What do you think? Answer below!
All seats challenged in Bay Minette for municipal election
"Anyway we can strengthen our town is going to make us more attractive to big industry; we need to work both ends of it." ... Norman is a certified municipal officer and is employed as a division director with the Alabama Board of Pardons and Paroles ...
Read more on al.com (blog)

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Economy Forces Gourmet Food Companies To Focus

Article by Greg Sprout

The Recent Downturn May Be Blessing in Disguise

Like virtually all companies in almost every industry on the planet, gourmet food manufacturers have been hit hard by the ongoing downturn in the economy. Generally sluggish sales across all channels have been exacerbated by the mass delisting of premium quality gourmet food products by many upscale grocers. While these “de-lists” are always a shock to any gourmet food company’s top and bottom-lines, once the initial shock has passed, it presents an opportunity for specialty food producers to “get back to their roots”. (At Epicurean Foods, we feel qualified to discuss this growing trend because we have first-hand experience with it. We recently suffered de-listing of all of the products that we had with two of the county’s leading upscale grocery stores.)

Many Grocery Stores are Struggling To Survive

The grocery store chains are not immune to the downturn in the economy any more than virtually every other type of business (in or out of the food industry.) As behemoths such as Wal-Mart, Costco, Sam’s Club and Target and others continue to expand their presence in the grocery business, traditional grocery stores are forced to operate in an ever-increasingly competitive environment.

Previously (i.e. when the economy was stronger), this competitive environment meant that upscale grocers tried to distinguish themselves from their competition by offering increased product selection and superior service, among other things. Seafood counters, in-store specialty bakeries, whole international foods sections and broad category offerings of “hard-to-find” gourmet and specialty foods had become the norm for grocery store chains attempting to attract upscale consumers to their store. (For example, upscale lines like our Small Pleasures Teas, pasta culinario pastas and pasta sauces, Windermere Herb Farm Dip Mixes, Rubbit On! Spice Rubs and Regan Ridge Bread Dippers were all available as a premium quality alternative to the national brands.) The prevailing logic was that every grocery store carries bread and milk and eggs. That was a given. To attract the highly sought-after upscale “yuppie” consumer, there needed to be another “draw” to the store. The extra cost of offering the convenience of enabling these customers to purchase their gourmet and specialty foods when they did their regular weekly grocery shopping was a price that many upscale grocers were willing to pay.

Back to the Basics

The ongoing downturn in the economy is causing grocers to “get back to the basics”, where all unnecessary costs are being eliminated. The extra costs of offering the slower-moving gourmet and specialty items have been deemed as unnecessary. As a result, product selection has been severely reduced, if not eliminated entirely, by many grocers across North America. In short, grocery stores are focusing exclusively on selling groceries at the cheapest possible price. There is little emphasis on gourmet.

While the upscale grocery channel was never a central focus of our business strategy, it has now been virtually eliminated as a sales channel. However, once this new reality was fully processed by us, it became increasingly evident that in a Web 2.0 world, the traditional sales channels that we had been using since we started our company in 1993 have been steadily decreasing in importance to us. In summary, we have been transitioning from being “Epicurean Foods International Inc.” to “http://www.epicureanfoods.com” for the past few years anyways. This latest industry-wide grocery-store product rationalization is just the next step in the transition.

“It’s Not A Problem, It’s An Opportunity”

While it may seem a bit trite to state, this recent industry-wide development is not really a problem for us and for many other resourceful gourmet food companies across Canada and America. Regardless of what the economy does or what decisions grocers make, the gourmet food business continues to grow steadily. Upscale consumers everywhere are demanding different, interesting and unique specialties that add “flavor” (if you’ll pardon the pun) to their lives. Increasingly, the Internet is the channel in which they find these increasingly hard-to-find items. Since 1998 when we first began offering our gourmet foods online through our website, http://www.epicureanfoods.com, it has steadily grown to become our primary sales channel.

Greg Sprout, Co-Founder,

www.epicureanfoods.com

About the Author

Since 1993, we have operated our own gourmet & specialty food company. We offer our own and other artisanal producers’ products to our wholesale and retail customers across North America via our website, http://www.epicureanfoods.com. While we are very proud of the collection of fine foods that we have assembled, we believe that gourmet food should not be intimidating, but rather, fun and definitely very enjoyable!

SLOWING ECONOMY LEADS TO UPTICK IN BASEMENT WATERPROOFING

application for a pardon
by SS&SS

Article by Greg Lucas

Homeowners and Investors Seeking More Living Space

One offshoot of the stagnating economy and lackluster national home sales statistics is that more people today are finding themselves living in their home far longer than they originally intended. Homes in need of upgrades that were purchased primarily as investment are now becoming permanent living quarters for the owners who never intended it.

The net result is that small private real estate investors and homeowners who in the past had only dealt with cosmetic home upgrades are now finding themselves facing the prospect of far more comprehensive home improvement projects, such as basement waterproofing and basement upgrades. Also, homeowners hoping for any increase in their homes net value can no longer rely on inflation as they have in the past.

It seems that the long ignored basement is now being rediscovered and exploited by more homeowners looking to add some extra finished square footage to their homes, thus increasing the market value of their investment. However; as one industry analyst put it, “basements can be tricky upgrades”.

Basement waterproofing services and products have are now exploding on the home improvement scene as a new growth industry even in these recessionary times and the reasons are two-fold. First, an upgraded basement that is not waterproofed properly can turn out to be investment money that is “water under the bridge”. Pardon the pun.

Secondly, home owners that in the past would have opted to “take a pass” on basement water and moisture issues by selling the home for a profit are now having to become more informed once they realize that basement waterproofing problems are theirs to solve. Add to that as one contractor put it in a recent interview, “basements aren’t cheap to upgrade to living quarters”.

Even if there is no visible water or leakage and the basement appears to be perfectly dry, a relatively small amount of moisture during a short period of time can lead directly to mold. Also, it is important to bear in mind that even if mold isn’t visible on the walls surface, it can be present hidden behind walls and remain viable health hazard.

On a further note: Increasing demand has spurned the development of new permanent basement waterproofing solutions, including user friendly, one application interior wall sealers. Other popular, easy to use products that have been developed and are now available are more powerful and effective mold and odor retardants.

Contact person: Greg LucasCompany Name: Allaboutbasementwaterproofing.comPhone #: 678-550-4747Fax #: 678-550-4747Email: thanksfortheletter@gmail.comWebsite: http://www.allaboutbasementwaterproofing.com

About the Author

http://www.allaboutbasementwaterproofing.com

Understanding the Unofficial Economy

Some call it the “unofficial” or “informal” economy, others call it the “grey economy” but the old name fits it best: the “black economy”. In the USA “black” means “profitable, healthy” and this is what the black economy is. Macedonia should count its blessings for having had a black economy so strong and thriving to see it through the transition. If Macedonia had to rely only on its official economy it would have gone bankrupt long ago.

The black economy is made up of two constituent activities:

1.. Legal activities that are not reported to the tax authorities and the income from which goes untaxed and unreported. For instance: it is not illegal to clean someone’s house, to feed people or to drive them. It is, however, illegal to hide the income generated by these activities and not to pay tax on it. In most countries of the world, this is a criminal offence, punishable by years in prison.
2.. Illegal activities which, needless to say, are also not reported to the state (and, therefore, not taxed).
These two types of activities together are thought to comprise between 15% (USA, Germany) to 60% (Russia) of the economic activity (as measured by the GDP), depending on the country. It would probably be an underestimate to say that 40% of the GDP in Macedonia is “black”. This equals 1.2 billion USD per annum. The money generated by these activities is largely held in foreign exchange outside the banking system or smuggled abroad (even through the local banking system). Experience in other countries shows that circa 15% of the money “floats” in the recipient country and is used to finance consumption. This should translate to 1 billion free floating dollars in the hands of the 2 million citizens of Macedonia. Billions are transferred to the outside world (mostly to finance additional transactions, some of it to be saved in foreign banks away from the long hand of the state). A trickle of money comes back and is “laundered” through the opening of small legal businesses.

These are excellent news for Macedonia. It means that when the macro-economic, geopolitical and (especially) the micro-economic climates will change – billions of USD will flow back to Macedonia. People will bring their money back to open businesses, to support family members and just to consume it. It all depends on the mood and on the atmosphere and on how much these people feel that they can rely on the political stability and rational management. Such enormous flows of capital happened before: in Argentina after the Generals and their corrupt regime were ousted by civilians, in Israel when the peace process started and in Mexico following the signature of NAFTA, to mention but three cases. These reserves can be lured back and transform the economy.

But the black economy has many more important functions.

The black economy is a cash economy. It is liquid and fast. It increases the velocity of money. It injects much needed foreign exchange to the economy and inadvertently increases the effective money supply and the resulting money aggregates. In this sense, it defies the dictates of “we know better” institutions such as the IMF. It fosters economic activity and employs people. It encourages labour mobility and

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