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Question: The informal or underground economy operates off the books and typically for cash. Estimates of the underground economy in the United States are usually less than 10%. William Lewis, however, reports that half of Brazil's workers labor in the "informal" sector.3 The Brazilian government represents nearly 40% of GDP, and corporations pay 85% of all taxes collected. Could lowering tax rates actually lead to higher tax revenues for the Brazilian government (a Laffer curve experiment)?

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