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The Evader Next Door

Publication Date: 
April 23, 2007
Janet Novack

Professor Joseph Bankman is quoted in a Forbes story about tax evasion, specifically tax evasion by small business owners who operate in a cash economy:

"'In terms of the tax gap, that's where the money is,' says Joseph Bankman, a professor of law and business at Stanford who was one of the first to warn that corporate tax shelters were spinning out of control. He is now studying unreported income. He argues the government needs to get tough now because honest businesspeople can't compete. 'It's an inefficient way to run an economy,' he says. 'Everybody is cheating like mad and the [pre-tax] rate of return in the sector goes down.'"

"These aren't some easy-to-vilify Silicon Valley entrepreneurs. They're Ma and Pa who run a successful, or a not-so-successful, restaurant."