Europe’s India?

I was reading http://www.spiegel.de/international/europe/economic-crisis-in-italy-continues-to-worsen-a-912716.html when this paragraph caught my eye!

“But the country’s structural problems remained. They include, in addition to the tax burden, a bloated bureaucracy that obstructs almost all economic activity, an inefficient judiciary that deters potential investors with trials that can last for decades, a relatively low education level and a poor infrastructure characterized by potholed streets, an energy supply prone to failure, constantly delayed trains and outmoded communication networks.”

That made Italy look a lot like India, except for the outmoded communications parts, thanks to our 4G networks!

In a critique on that article and a proposed fix, Mish talks about “Letta blamed Italy’s underground economy – which ranges from simple tax evasion to organised crime and accounts for some 25 percent of the overall economy according to most studies – for damaging competitiveness.”

And goes on to suggest “Italy’s massive underground economy is a symptom of the dysfunctional nature of the real economy. The underground economy thrives because of high taxes, poor infrastructure, political favoritism, and inane labor rules.”

http://globaleconomicanalysis.blogspot.in/2013/07/euro-sucks-italian-blood-prime-minister.html

The underground economy of Italy sounded similar to India’s Black Economy. However, as a comparison, the USA has a 35% gift tax and has a 43% inheritance tax (both of which are “0” in India) and are followed rigorously (at least by the Great American Middle class!). So, I don’t agree with the reasons Mish ascribes for the existence of the shadow economy!