An interesting article from Bloomberg; some snips:

Germany is cracking down on its growing black-market economy as workers duck some of the highest taxes in Europe. With companies trying to cut costs as the global credit crisis pushes Europe's largest economy near recession, more people may be forced underground. And Chancellor Angela Merkel plans to extend the minimum wage, a move economists say may send more work under the table and cost as many as 600,000 jobs.

Germany's lower house of parliament, the Bundestag, is due to discuss the proposals as early as next month, just as the global credit crisis begins to bite into growth. The European Commission last month cut its forecast for the economy of the 15 euro nations this year and forecast Germany would slip into a recession.

``We already have the problem of a flourishing black market, and with a minimum wage, labor would become even more expensive,'' said Ruediger Parsche, an economist at the Ifo economic institute in Munich.

In 2007, Germany's black-market economy -- derived from what's left over after legitimate spending is accounted for -- made up about 15 percent of gross domestic product, according to Friedrich Schneider, a professor at the University of Linz in Austria who studies illegal labor. That compares with 7 percent in the U.S.

Germans' income tax and social security contributions amounted to about 42 percent of earnings in 2007, compared with around 24 percent in the U.S., according to the Organization for Economic Cooperation and Development.

To sidestep some of that tax, a driving instructor in the German state of Hesse said he declares only two-thirds of his earnings.

The 43-year-old father of one said he works 14 hours a day, six days a week, and earns about 2,000 euros a month under the table. He said he wouldn't take home enough money to maintain a decent standard of living if he declared that income. Given how widespread the practice is, he said, he would be foolish to do otherwise.