What I means was that as an individual, the move between 1099 and w-2 decreases your tax burden in large part because it increases the tax burden of the entity which employs you. Taxation has a thermodynamic quality like that. It’s not as thought payroll tax revenues are higher from incomes of self-employed individuals; it’s simply that the individual shoulders all the burden instead of splitting it w/his or her boss. You generally get paid less as a result if you make the switch from contract to employee.
On the other hand, if you’re (un?)lucky enough to go from 1099 indie contractor to filing a k-1 and having employees, then you’ve just jumped up a couple levels — which could be really good — and you’re in for some increased costs, although monies spent on wages are fully deductible.
I don’t think it’s really a question of who’s getting it “stuck to them.” If you lower the costs on employers, you raise them on employees, many of whom can ill afford having it stuck to them any harder. It would be nice if we didn’t have to pay taxes, but I kind of like roads and stuff.
Still, we’d all be better off as hedge-fund managers, or running businesses big enough that they work on revolving credit and never show taxable profits. ;)
What I meant was
What I means was that as an individual, the move between 1099 and w-2 decreases your tax burden in large part because it increases the tax burden of the entity which employs you. Taxation has a thermodynamic quality like that. It’s not as thought payroll tax revenues are higher from incomes of self-employed individuals; it’s simply that the individual shoulders all the burden instead of splitting it w/his or her boss. You generally get paid less as a result if you make the switch from contract to employee.
On the other hand, if you’re (un?)lucky enough to go from 1099 indie contractor to filing a k-1 and having employees, then you’ve just jumped up a couple levels — which could be really good — and you’re in for some increased costs, although monies spent on wages are fully deductible.
I don’t think it’s really a question of who’s getting it “stuck to them.” If you lower the costs on employers, you raise them on employees, many of whom can ill afford having it stuck to them any harder. It would be nice if we didn’t have to pay taxes, but I kind of like roads and stuff.
Still, we’d all be better off as hedge-fund managers, or running businesses big enough that they work on revolving credit and never show taxable profits. ;)