A self-employed commercial artist reports taxable income of $7,000. In reality, her income is considerably higher however much of it takes the form of cash for small projects and thus is easy to conceal. She deliberates herself part of the underground economy and defends her behaviour as a tactic that allows her small business to survive. If the business were to fail she contends the government would receive even less tax revenue.

Q1 is the need to survive a reasonable defence for the practice described here? Describe your answer.

Q2 If the practice of covering income is widespread as implied by the phrase underground economy, is it really wrong? Utilizing information from your textbook to defend your answer.