Activity 1 page 2

Explore

In Workbook 17, you learned that the government uses a tax base to pay for social programs and services provided to citizens. Most federal funds are collected as income tax, corporate tax, and sales tax.

However, goods and services can be sold without the paying of these taxes. This type of purchasing and selling without paying taxes is called tax evasion, which in turn creates an underground economy or black market.

Reconsider the information in the Get Focused. How might the sale of goods and services without paying taxes impact the government and taxes?

tax evasion: not paying taxes when expected to do so, or not declaring all income earned

underground economy: the buying and selling of goods and services illegally

black market: another term for underground economy

 Vocabulary

Add definitions for the terms tax evasion, underground economy, and black market to your Issues for Canadians Definitions handout.

As you continue through this activity, you may add to these definitions.

Save your updated handout to your Activities folder.

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©Thinkstock

1. For an example of the underground economy, view the cartoon on page 284 of your textbook, Issues for Canadians.
   
   
2. Consider the first question at the bottom of page 284 by brainstorming a list of consumer behaviours that might reduce tax revenue to the government.
   
   
3. Read the information on page 283 of the textbook.
   
   
4. Read the advice column on page 285. What are the points of view of each response to the letter received by Mr. Equity?
   
   

Complete the Letters to Mr. Equity chart to collect your ideas.

Click on one of the links below to access the activity.

Letters to Mr. Equity  (Word)
Letters to Mr. Equity (pdf)
Letters to Mr. Equity (Google Doc)

Save your completed work to your Activities folder.