That's a very accurate description of how it is where I live. But at the end you call it a terrible win-win for everyone. If it's a win-win for everyone how can it also be terrible?
I think that it's like local maximum. There's higher maximum when everyone obeys the law and everyone's getting good salary. But it's hard to move there, because nobody wants to do it now. Also it creates bad incentive for police to arrest innocent people and to blackmail money from them for things they did not do, and it does not punish enough those who need punishment, so they do not learn their lessons and continue to break laws.
Because people are getting away with ignoring the law, and in turn that makes bad laws more transparent, which in turn give people even more incentives to bribe their way out of situations.
I heard that post-war Germany had a massive corruption problem so they made bribing legal (but not bribe taking) and bribes tax-exempt. So everyone declared their bribes on their tax returns, the bribees were discouraged (or prosecuted) and the problem was solved. But this only works if you pursue the bribe takers.
"See Implementing the 1996 OECD Recommendation on the Tax Deductibility of Bribes to Foreign Public Officials, OECD (May 26, 1997) (Report by the Committee on Fiscal Affairs ("CFA") to the OECD Council at Ministerial Level) [hereinafter Implementation of Tax Deductibility Recommendation] (describing current member state practices regarding the tax treatment of overseas bribes). Attitudes of OECD Member countries concerning the deductibility of bribes to foreign officials vary greatly. See id. at 7. The laws vary accordingly but in most countries, bribes across borders are deductible as business expenses. See id. at 7-8; M. Javade Chaudri, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Conference on Corruption, American University, Washington College of Law. April 6. 1998). in 2 COMBATING CORRUPTION-RECENT MULTILATERAL INITIATIVES 252 (1998) [hereinafter 2 COMBATING CORRUPTION I (on file with author) (summarizing and analyzing the OECD Convention, listing the signatories to its provisions, and noting that foreign bribery and related tax-deductibility is an accepted German business practice). The OECD Member countries are: Australia, Austria, Belgium.
Canada, Czech Republic, Denmark, Finland. France. Germany. Greece. Hungary.
Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands. New Zealand,
Norway, Poland, Portugal, South Korea, Spain. Sweden. Switzerland. Turkey.
United Kingdom, United States. See id. at 261."
And? INAL but I believe taking bribes is worse legally than not paying taxes so if you are willing to do the former, then why does the latter really matter? If you are going to take bribes, you are obviously not going to report it for fear of that second infraction because the first one would be worse and thus you wouldn't take the bribe in the first place if the latter infraction scared you.
It's kind of an "on paper" crime, a la Al Capone. You'll get caught quicker if you have a manual audit after paying bribes. The IRS keeps your returns private, for the most part, and if you don't pay you could have 10 years tacked on.
I tend to think the corrupt way is often more fair than nothing. But less fair than a less corrupt system. Notable legal corruption is totally a thing. Just because you're not expected to bribe an police officer doesn't mean the system isn't exploitative.
