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Legislation aims to crack down on CA underground economy


SACRAMENTO, Calif. (AP) — Lawmakers and Gov. Jerry Brown hope to bring California's underground economy into the open in an effort to boost tax collections. The Democratic governor on Monday announced signing legislation that is intended to reduce the amount of tax revenue eluding the state each year. An analysis of AB576 says about $9 billion in potential tax revenue goes uncollected each year, due in large part to income that is under-reported or not reported at all. Evading tax payments reduces the amount of money available to fund government services, leaves workers without basic job protections and creates unfair competition for legitimate businesses. The bill by Democratic Assemblyman V. Manuel Perez of Coachella creates a pilot program until 2019 for several state agencies to join forces to combat criminal tax evasion.

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