sepheronx wrote:OK, fair enough. I seen other ones dated from last year about how shadow economy or people being paid under the table constituted something ridiculous like $90B in lost tax money. Russia is no different technically to that of Italy and Greece with similar issues.
But since I got your attention KVS, what do you think should be the steps taken and what should be concentrated on? I tend to like your opinions so I would like to hear on this from you.
The shadow economy is not the same thing as corruption. I see it here in Canada where you can pay someone for contract work or
goods in cash to avoid paying taxes. So it will never be zero, especially not in Russia. In my view its natural level is around
10% of the GDP. Many articles on the subject ladle on the political bias of the journalist and the rag they work for. Any sort of
shadow economy and corruption in Russia is used as a pretext for denigration and moral pontification. The exact same conditions
in the west are totally
I do not find the $90 billion in lost tax money estimate to be credible. That's like 50% of the federal tax revenue level. I think it
scales with the GDP fraction. So the real amount is 20% as of 2010 and less today. I really would be more worried about the
legal tax evasion that is rampant in the west also being the case in Russia. Since Russia likes to import western myths and tries
to make them reality.
For example, the case of GE.
I can see that the sort of under the table tax evasion I have seen in Canada would be larger in Russia due to economic stress
and cultural issues (i.e. people lost respect for many things under communism and the Yeltsin era was in many ways the coup
de grace). But this is peanuts compared to the shenanigans of corporations who shuffle their incomes through offshore banks.
I have not seen anything that indicates the shadow economy is some crisis for Russia. It is a slowly disappearing feature which
cannot be removed by edict and prosecution unless we want a return to authoritarianism. Frankly, it does not merit the amount
of attention it is being given. The key thing for Russia is to facilitate economic growth. The monetarist clowns in the system
are actually a bigger threat.