I realise that you are making an off the cuff example, and I agree with your basic point. However, in the places I have lived, the babysitter would be an indepe

I realise that you are making an off the cuff example, and I agree with your basic point. However, in the places I have lived, the babysitter would be an independent contractor and thus responsible for her own taxes. Moreover, it is unlikely that she would be making enough money to exceed the personal exemption, and therefore, it is unlikely that she would owe taxes anyway. An argument could be made that she should collect and remit sales tax or VAT where applicable, but again, there are usually thresholds below which there is no obligation. My point is that well run, non-corrupt, systems tend to have exemptions to make everything sane and reasonable. If these exemptions don't exist, you can believe that it is because the system is corrupt and not because they are trying to stop corruption.