House and Senate Democrats say the government could collect as much as $100 billion more a year by whittling the tax gap — the unpaid taxes, mostly on unreported earnings, that the I.R.S. estimated was about $300 billion a year.Kip rightly points out that most of these unreported earnings take place near the bottom of the earnings scale, but he forgot the biggest culprit - waitresses and waiters.
In my experience, tipped employees report less than half of their actually earnings. The people that earn tips, but aren't 'expected' to earn tips (maitre'd, valets, dancers, etc) probably don't report anything at all.
Its unfortunate that when Democrats say they care about the little guy more people don't realize that the caring stops at the voting booth.