Quote Originally Posted by chaika
I was always curious about that under-the-table salary. In the US we get a government pension called Social Security when we retire. The amount we get is based on how much we paid in SS taxes.
Today the US Government would collect the actively employed people's Social Security and hand it over to the retirees. As the ratio of the retirees to the actively employed changes, so the future promise of the social security becomes less realistic. So, a lot of people I know would prefer to hide their capital in tax shelters (and otherwise) rather than rely on the Government's promise. That, however, doesn't lead to the system in which employers would prefer to pay their employees cash.

I would say that businesses in Russia would be taxed unreasonably high if they would operate in a fully legal manner. As an employer, you should also consider the real government taxes (you'd need to pay each official for them to not crush your business) and their fees are set arbitrarily. And you should also count in some "protection" portion (which can be significant) depending on the nature of your business. Also, some people are pretty sure their tax money would not be spent by the Government decently so they aren't eager to contribute to the official budget. In a nutshell, if you want to operate a business in Russia, your chances of doing so in a fully legal manner are somewhat slim.

PS. Nymph, in thy orisons be all my sins remembered...