[nmcfarl]

I think this depends upon who you are, giant multinationals have no problem filling out the paperwork for day laborers.

Some guy who want some help with his yard-work one Saturday, probably is just going to skip hiring a day laborer if he has to register with the state as an employer and fill out all the local, state and federal income tax and employment tax forms for a days work. Even if the amount of money to pay that tax is trivial.

I think the informal economy exists to avoid both taxes and paperwork. And for some things the cost of the paperwork is significantly higher than the cost of the taxes.