Nevermind the stupidity of reporting your criminal activities to the IRS, if you do anyway, do they count your income towards the GDP?
Are illegal activities reported to the IRS counted toward the GDP?
- Thread starter SsupernovaE
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JulesMaximus
No Lifer
- Jul 3, 2003
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The GDP is not calculated using IRS numbers, if it is, it's just to substantiate the final number. They use surveys to companies and the like. The GDP has been weighted to take account for unrecorded transactions, such as you selling cocaine. However, in the US, the adjustment is small. The GDP is a huge estimate/guess, they don't track every dollar.
No. But seriously, what if you reported something that you do not know was illegal for one reason or another. I guess what I'm asking is the GDP calculated using all reported income from the IRS, or does the IRS even factor its findings into the GDP.
In all seriousness, there are many people involved in illegal activities that start up fake businesses so they can launder their cash and make it legit. Paying taxes is a small price to pay for a legitimate front.
So I guess if said business would contribute to GDP, then yes.. it would be counted.
Obviously it's not reported as "income from cocaine sales"........
So I guess if said business would contribute to GDP, then yes.. it would be counted.
Obviously it's not reported as "income from cocaine sales"........
Capt Caveman
Lifer
- Jan 30, 2005
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Okay, but the IRS requires you to legally report ALL income regardless of legality. I know it's stupid and nobody would ever do it, but if someone did, would that income be considered part of the GDP.
ever heard of a hypothetical? This is simply a theoretical question about how the GDP is calculated.
I would assume yes, but I have no idea how GDP works.
The US supposedly produces 22 million pounds of marijuana a year.
I wonder if they factor that in?
That's $61,600,000,000 minimum.
:Q
Capt Caveman
Lifer
- Jan 30, 2005
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Let's see if I can make this easy for you. No one is going to report illegal activity to the IRS and you can google the definition/calculation of GDP.
TehMac
Diamond Member
- Aug 18, 2006
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GDP = Consumption + Government Expenditures + Ig (investment) + Net Exports
GDP is calculated deliberately avoiding back alley details because the analysts feel it doesn't represent a country as a whole, unless its Thailand, and in any case, no one is going to report it. If they did, the FBI would get involved instead, and the government confiscates the money.
I read an interesting thing about this in the Times today actually. It was about the French economy vs the British, and how the comparative measurements are often misleading, but as an example they mentioned that years ago the Italian economy had briefly overtaken both of ours by declaring their huge illegal (mafia) economy as GDP. It backfired on them though, as the EU immediately demanded a large increase in thier contributions, which are based on GDP. Needless to say they stopped declaring it.
I wonder what the US GDP would be if we included illegal activities? Probably 16 to 17 trillion.
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