But then I realized the enormous overhead that comes with taking payments in Israel. I'd need to open an account with the tax authorities and deal with a bunch of paperwork I don't understand. So now I'm busy learning the tax system or hiring an accountant... it's just not worth it unless they're going to commit to a large amount of hours, but I do value my free time as well. So either you pay me enough to quit my full-time job at a big company or forget about it. It's hard to do small amounts of freelance work because of the onerous regulatory environment.
All this is different for USians, who have to file tax returns every year anyway and simply need to add another source of income on their 1040.
The second year, I just paid an accountant to do it for me. It was very expensive given that the accounts could be written in their entirety on a single sheet of paper. But I had the peace of mind that it was all done correctly by an expert, and they were responsible for ensuring it was all done by the book and filed properly. And they found a few mistakes I made in the previous year.
The accounts are essentially a fixed overhead; it doesn't get much more expensive if you do 10 or 100 times the business. But that makes starting out hard because it's a big annual fixed cost.
I do wish freelancing was easier, be it on closed or open projects. It does seem like governments have stifled entrepreneurship with overly burdensome taxation policies. I'm not opposed to paying income tax, but I do think it could be made sufficiently simple to pay for small freelance activities that it's not deterring it, and that would be beneficial for the economy overall. Many of these small jobs could be the catalyst for the formation of a new company if they take off.
I've previously worked on large open-source projects like Debian, taking upon many obligations and essentially working a second full-time but unpaid job. That's definitely unsustainable, and I quit for several reasons with this being the major factor. Working like this is definitely not in anyone's self-interest.
Like another poster in this part of the thread, I have tried my hand at open-source consulting work, and I didn't have a viable business. You can't rely upon the sporadic needs of end users; you need something more sustainable, and not every project can support that.
This is coming from a UK perspective, but if you're earning money in anything more than trivial quantities, you need to register as a sole trader or create a limited company. That brings with it legal obligations, and other obligations, like bookkeeping, separate bank accounts, corporation tax payment, company reports and tax returns, personal tax returns and more. That makes for a lot of friction to take payments, and is a huge amount of hassle and inconvenience. But these are all factors in why I don't currently have any intention to make money from open source projects. There needs to be a way to narrow the gap required to make the transition from unpaid to paid work without all of the overheads of running a full company. Maybe there are ways around that to make it an easier burden to bear.