> By that logic, if they just pay their taxes it won't affect their lifestyle either, so their incentive to cheat is also lower. Not quite. You need to think

> By that logic, if they just pay their taxes it won't affect their lifestyle either, so their incentive to cheat is also lower. Not quite. You need to think about when they have the money. It is “capitalism” after all, not “moneyism.” If you build/invest-in something using $10mil that should have been tax, with a decent ROI you might make that money back in 5-10 years. Now you have the original money, plus own something that continues to make money. Income++, but your “back taxes” are still the same for the earlier fraudulent period. (assuming the IRS doesn’t take stuff like this into account when dealing with collecting “back taxes”)