Readers Report

MORE NOTES ON THE UNDERGROUND ECONOMY

The estimated $127 billion of income taxes not collected on unreported income of $539 billion would certainly go a long way in avoiding increased taxes ("Notes from the underground economy," Economics, Feb. 15).

One of the reasons cited for noncompliance is the lack of understanding of the tax code and forms by the public. Rather than beefing up the IRS, thus increasing the cost of government, perhaps the solution is tax simplification. Voluntary or involuntary tax evasion can easily be avoided by enactment of a value-added tax in the 10% to 15% range.

One requirement of establishment of a value-added tax would be to reduce income-tax rates comparably, so those taxpayers presently in compliance would not be unduly burdened.

Louis A. Scafidi

Oregon City, Ore.

People cheat on their taxes because people are cheated by their own government. We read how congressmen are loved and given gifts by lobbyists. We feel cheated, robbed, and, in a way, mugged. My medicare payments increase, and the benefits decrease.

Herbert L. Grosberg

Caseville, Mich.