Consumers may suffer from fiscal illusion but not entirely. In the UK, the tax man is concerned that too many people are spending their pounds in the black market economy so that the transactions are not being taxed appropriately. From the head taxman in the UK:
"Paying a builder or cleaner in cash, allowing them to evade VAT or income tax, will result in even deeper government cuts to public services, he says. People who contribute to the cash economy cannot then complain about austerity measures, he adds." (see here for article)
In the US, its the bankers who are peeved over the audacity of the rest of the economy to protest paying higher fees for swiping debit cards. Last year, the banks and retailers fought head to head over new legislation capping the amount of fees. (oh yes, the real fight was in Congress but the legislators were fueled by donations and lobbyists from both sides) The banks lost so now they are retailiating:
Even those in the industry who privately admired the aggressive tactic because they can claim a win if Lugar fails said it could backfire. GOP leadership and party committee aides have quietly let the industry know they aren’t happy, according to several downtown sources.
“Engaging in efforts to primary a sitting Republican senator is pretty reckless for an industry without a lot of friends at the moment,” said a senior Republican Senate aide. “It certainly hasn’t gone unnoticed within the Republican Conference.”
The decision made waves throughout the industry, where it was widely viewed as payback.
“There are just a lot of sour grapes out there,” said a GOP financial services industry lobbyist.
But with more battles over swipe fees on the horizon, bankers want to make it clear that there will be consequences for Republicans who vote against them.
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