The Untaxed Sector of the Economy Grows

Strategy and Business reports on the non-profit sector:

the nonprofit sector—the social commons—has been growing even faster than I had envisioned. Between 2000 and 2010, after adjusting for inflation, nonprofit revenues in the U.S. grew by a striking 41 percent, more than double the growth in GDP, which increased by only 16.4 percent.

“The nonprofit community is also the fastest-growing employment sector, outstripping both the government and private sectors in many countries. There are currently 56 million workers employed in the nonprofit sector in 42 countries, and in many of the most advanced industrial countries—including the United States, the United Kingdom, and Canada—employment in this sector now exceeds 10 percent of the workforce, and its trajectory has been rising year over year since 1995. During the Great Recession (2007–09), the nonprofit sector gained jobs at an average rate of 1.9 percent annually, while the private sector lost jobs at a rate of 3.7 percent.

If less people are paying taxes, it might be difficult to fund a big welfare state.