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In many European countries, particularly France, Germany, and Italy, firing a poorly performing worker is extremely difficult, and in some cases impossible. The amount of paperwork and legal proceedings that an employer has to undertake to get rid of a worker is sometimes beyond belief—at least for Americans.

A comparison of Europe and the United States suggests that our conclusion about the importance of taxes is correct. European nations, on average, have imposed higher marginal tax rates on their citizens than has the United States. Estimates of the size of the underground economy are that it is twice as large in Europe as [...]

Despite drugs and human organs, however, the most important stimulus for the underground economy likely comes from taxes. Let’s face it, if your marginal tax rate were only, say, 15 percent, how much effort would you spend to avoid reporting income?

Certainly, if you are engaged in the illegal drug trade anywhere in the world, you cannot be part of the official, reported economy. You have to use cash and also be careful that your illegal transactions cannot be traced by government authorities, including tax collectors. Otherwise, you’ll soon be headed for jail.

Good things don’t often require any further action or follow up—they just happen and you move on. But the more trying details require your attention and focus, quickly overshadowing the good that has happened. When you keep a log of the good things they become more concrete.