5 ms·

I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the

I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.

gen220 4y ago
Snippet from my reply to a similar sibling comment: Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense. My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source. The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.
- disintegore 4y ago
  That's fair, but your post might have been more prescriptive than you intended. Your wording insinuates that New York doesn't actually have a problem with incomes relative to cost of living because most people make up for that through an informal economy. There is ambiguity, granted, but on the surface that looks like a massive stretch. The figure might be impacted, but for it to be completely eclipsed is another order of magnitude entirely.
  - gen220 4y ago
    You're right! I went ahead and edited it to hem closer to my original intent. I totally agree that NY has a significant (income:cost of living) problem. My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto. I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.
settrans 4y ago
I (obviously) lack the data to back up GP's assertion, but anecdotally I've seen very similar things happen in South Brooklyn: the husband working a low-paying blue collar job on the books, while the wife worked at a nail salon off the books; or the husband taking in an NYPD pension while working security off the books, getting paid in cash. In both instances, the families rented out the other units in their buildings, also accepting rent payments in cash (and not reporting them).
- SilasX 4y ago
  I was a first date with a woman from a dating site who unleashed her opinions on how unfair it is that the rich evade taxes, and then later dropped that she was in such an arrangement where she rented a spot at a hair salon and was paid entirely in cash and reported almost none of it, while drawing social services for her and her kid. (Bay Area rather than NYC though.)
  - stemlord 4y ago
    I don't feel middle class folks evading taxes to more or less survive is a comparable offense to the rich doing so just because they can
    - rayiner 4y ago
      You should. The thing that makes European social democracies work is that everyone is in it together and buys into the system. When you chip away at that universality—when you say that some people should be able to put their personal self interest ahead of the system—the social trust collapses. Our au pair from Germany paid the same total tax rate on her entry level, non-university required office job back home as we paid on a mid six figure income in Maryland. That’s what makes their system work.
      - Nextgrid 4y ago
        > The thing that makes European social democracies work is that everyone is in it together and buys into the system That's far from true. If we talk about percentage of income, the lower and middle classes subsidise everyone else. There are many legal ways to avoid (not evade, which is illegal) taxes if you have enough upfront capital and that is practiced by every big company and upper-class household regardless of location. There are also lots of ways through corruption, lobbying and under-the-table payments or other favours to unjustly enrich oneself at the expense of the taxpayer if you have the right connections. European countries still "work" but that's more due to inertia and the system is starting to break down; the pandemic accelerated it and we're starting to see the first systemic failures such as the UK (well not technically Europe anymore, but the stage has been set long ago when they were still in the EU). Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat. Europe just enjoys more inertia but it's just a matter of time.
woodruffw 4y ago
I'm a native NYer, and the GP's comment is largely correct: tax fraud and "informal" (meaning under-the-table) pay is more or less the norm for broad swathes of the city's service and contracting industries. Every job I ever had in high school was paid under the table, and this is true for my family members as well. It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee. All that being said: this doesn't necessarily contradict the claim that large numbers of New Yorkers aren't making a living wage. Under-the-table agreements enable wage suppression/theft and make it more difficult for the city to use its labor laws to protect workers.
- Wowfunhappy 4y ago
  > It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee. For what it's worth, I live in NYC and have never experienced this. Lots of smaller places give cash discounts, but in my experience it's in the range of 3–4%, which sounds like a CC fee.
  - woodruffw 4y ago
    Which part do you live in? This was the norm in the neighborhood I grew up in (north of UWS), as well as everywhere I've lived (Harlem, north Brooklyn). I wouldn't expect it to be the norm in areas where the foot traffic might pay credit cards by default; I think it's mostly in areas where cash business comes first anyways. Edit: I wish people wouldn't downvote you. It's a massive city, and it's entirely possible to never experience this!
    - Wowfunhappy 4y ago
      I live in Manhattan. My apartment is in Harlem, but I don't spend much time there, I'm usually further downtown.
      - 4y ago

I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.

gen220 4y ago

Snippet from my reply to a similar sibling comment: Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense. My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source. The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.

disintegore 4y ago
That's fair, but your post might have been more prescriptive than you intended. Your wording insinuates that New York doesn't actually have a problem with incomes relative to cost of living because most people make up for that through an informal economy. There is ambiguity, granted, but on the surface that looks like a massive stretch. The figure might be impacted, but for it to be completely eclipsed is another order of magnitude entirely.
- gen220 4y ago
  You're right! I went ahead and edited it to hem closer to my original intent. I totally agree that NY has a significant (income:cost of living) problem. My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto. I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.

settrans 4y ago

I (obviously) lack the data to back up GP's assertion, but anecdotally I've seen very similar things happen in South Brooklyn: the husband working a low-paying blue collar job on the books, while the wife worked at a nail salon off the books; or the husband taking in an NYPD pension while working security off the books, getting paid in cash. In both instances, the families rented out the other units in their buildings, also accepting rent payments in cash (and not reporting them).

SilasX 4y ago
I was a first date with a woman from a dating site who unleashed her opinions on how unfair it is that the rich evade taxes, and then later dropped that she was in such an arrangement where she rented a spot at a hair salon and was paid entirely in cash and reported almost none of it, while drawing social services for her and her kid. (Bay Area rather than NYC though.)
- stemlord 4y ago
  I don't feel middle class folks evading taxes to more or less survive is a comparable offense to the rich doing so just because they can
  - rayiner 4y ago
    You should. The thing that makes European social democracies work is that everyone is in it together and buys into the system. When you chip away at that universality—when you say that some people should be able to put their personal self interest ahead of the system—the social trust collapses. Our au pair from Germany paid the same total tax rate on her entry level, non-university required office job back home as we paid on a mid six figure income in Maryland. That’s what makes their system work.
    - Nextgrid 4y ago
      > The thing that makes European social democracies work is that everyone is in it together and buys into the system That's far from true. If we talk about percentage of income, the lower and middle classes subsidise everyone else. There are many legal ways to avoid (not evade, which is illegal) taxes if you have enough upfront capital and that is practiced by every big company and upper-class household regardless of location. There are also lots of ways through corruption, lobbying and under-the-table payments or other favours to unjustly enrich oneself at the expense of the taxpayer if you have the right connections. European countries still "work" but that's more due to inertia and the system is starting to break down; the pandemic accelerated it and we're starting to see the first systemic failures such as the UK (well not technically Europe anymore, but the stage has been set long ago when they were still in the EU). Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat. Europe just enjoys more inertia but it's just a matter of time.

woodruffw 4y ago

I'm a native NYer, and the GP's comment is largely correct: tax fraud and "informal" (meaning under-the-table) pay is more or less the norm for broad swathes of the city's service and contracting industries. Every job I ever had in high school was paid under the table, and this is true for my family members as well. It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee. All that being said: this doesn't necessarily contradict the claim that large numbers of New Yorkers aren't making a living wage. Under-the-table agreements enable wage suppression/theft and make it more difficult for the city to use its labor laws to protect workers.

Wowfunhappy 4y ago
> It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee. For what it's worth, I live in NYC and have never experienced this. Lots of smaller places give cash discounts, but in my experience it's in the range of 3–4%, which sounds like a CC fee.
- woodruffw 4y ago
  Which part do you live in? This was the norm in the neighborhood I grew up in (north of UWS), as well as everywhere I've lived (Harlem, north Brooklyn). I wouldn't expect it to be the norm in areas where the foot traffic might pay credit cards by default; I think it's mostly in areas where cash business comes first anyways. Edit: I wish people wouldn't downvote you. It's a massive city, and it's entirely possible to never experience this!
  - Wowfunhappy 4y ago
    I live in Manhattan. My apartment is in Harlem, but I don't spend much time there, I'm usually further downtown.
    - 4y ago