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Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? Perhaps the real problem is that the IRS makes it such a massive PI

Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? Perhaps the real problem is that the IRS makes it such a massive PITA to be a contractor. You need to withhold your own taxes, pay nearly 30% of your money to the government, etc. Nobody likes that, and unsurprisingly, a lot of contractors fail to meet the requirements. You know who really doesn't like it? The IRS. When most of the population is on W2 employment, the IRS has a constant revenue stream of payroll taxes and automatically withheld income taxes coming into its coffers every pay cycle. But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. Also – just putting this out there – a population of contractors would have much more power in a hypothetical "tax boycott" than a population of employees. I could imagine some social movement convincing all the contractors in the country to boycott the IRS and skip paying taxes one year. I doubt "the government" is anywhere near competent enough to conspire against this possibility, but the existential risk is there. Surely they would prefer that the peasants don't realize the power of collective tax resistance.

balefrost 6y ago
But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. I don't know the entirety of the tax law, but I believe that you're supposed to make estimated tax payments quarterly. https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
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- TechBro8615 6y ago
  I'd like to see a poll of how many ICs actually do that. I bet it's < 50%.
  - mixmastamyk 6y ago
    The ones that don't want to pay penalties, which is probably significantly higher.
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nrmitchi 6y ago
> But with contractors, the IRS only gets that money once a year, IIRC this isn't true. Non-W2 earners are supposed to do quarterly taxes. > and often times they're missing a piece of it. This is kind of a bigger problem, no? If it gets to the end of the year, and so many 1099 contractors don't have enough to pay their taxes that it is actually an issue for the IRS, it strongly implies that those contractors didn't understand how much money they were actually making after tax (and thus, didn't put enough aside). Contractors not understanding how much money they are actually making (in relation to the W2 option) is not a good thing.
- TechBro8615 6y ago
  > IIRC this isn't true. Non-W2 earners are supposed to do quarterly taxes. Maybe in theory, but I would bet, certainly not in practice for the vast majority of contractors earning an average income. You have to be the most honest, organized goody-two-shoes to actually pay those quarterly taxes. It's also worth noting that many contractors live paycheck-to-paycheck, and even though they know they should be withholding 30% for tax, in practice they have bills to pay first. So when tax time comes (whether quarterly or yearly), they might simply not have the money.
  - nrmitchi 6y ago
    > It's also worth noting that many contractors live paycheck-to-paycheck, and even though they know they should be withholding 30% for tax, in practice they have bills to pay first. I find it kind of dishonest to call this "living paycheck-to-paycheck" while ignoring tax with-holding. That is not "paycheck-to-paycheck" as much as "not being paid enough to live".
    - TechBro8615 6y ago
      Totally agree, it’s not an ideal situation for the contractor or the government. The question is more whether the government (or your employer as a proxy) should play a protectionist role and handle the withholding for you, or if that should be your responsibility as a contractor. Speaking from personal experience, it’s much easier said than done. When your rent is due this month, taxes are due next year, and you’ve only got enough for rent... you aren’t gonna withhold 30%. It’s not because you don’t want to, but because you just don’t have the money. Call it poor financial management or whatever you want, but the reality is that lots of people get into this situation. Yet I doubt many of them would blame their clients (or Uber) for the problems. Most would say the government demands too much tax, or they can’t find enough work. Personally I would be in favor of a $30k annual basic income and eliminating all taxes on up to $100k in earnings. It will never happen, but it would be one of the best things to happen to society in a long time.
BitwiseFool 6y ago
I had never considered this angle before. This effort suddenly makes a lot more sense.
gher-shyu3i 6y ago
> Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? They don't. They had a survey and that's why Prop 22 passed.

balefrost 6y ago

But with contractors, the IRS only gets that money once a year, and often times they're missing a piece of it. I don't know the entirety of the tax law, but I believe that you're supposed to make estimated tax payments quarterly. https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...

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TechBro8615 6y ago
I'd like to see a poll of how many ICs actually do that. I bet it's < 50%.
- mixmastamyk 6y ago
  The ones that don't want to pay penalties, which is probably significantly higher.
deleted 6y ago
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nrmitchi 6y ago

> But with contractors, the IRS only gets that money once a year, IIRC this isn't true. Non-W2 earners are supposed to do quarterly taxes. > and often times they're missing a piece of it. This is kind of a bigger problem, no? If it gets to the end of the year, and so many 1099 contractors don't have enough to pay their taxes that it is actually an issue for the IRS, it strongly implies that those contractors didn't understand how much money they were actually making after tax (and thus, didn't put enough aside). Contractors not understanding how much money they are actually making (in relation to the W2 option) is not a good thing.

TechBro8615 6y ago
> IIRC this isn't true. Non-W2 earners are supposed to do quarterly taxes. Maybe in theory, but I would bet, certainly not in practice for the vast majority of contractors earning an average income. You have to be the most honest, organized goody-two-shoes to actually pay those quarterly taxes. It's also worth noting that many contractors live paycheck-to-paycheck, and even though they know they should be withholding 30% for tax, in practice they have bills to pay first. So when tax time comes (whether quarterly or yearly), they might simply not have the money.
- nrmitchi 6y ago
  > It's also worth noting that many contractors live paycheck-to-paycheck, and even though they know they should be withholding 30% for tax, in practice they have bills to pay first. I find it kind of dishonest to call this "living paycheck-to-paycheck" while ignoring tax with-holding. That is not "paycheck-to-paycheck" as much as "not being paid enough to live".
  - TechBro8615 6y ago
    Totally agree, it’s not an ideal situation for the contractor or the government. The question is more whether the government (or your employer as a proxy) should play a protectionist role and handle the withholding for you, or if that should be your responsibility as a contractor. Speaking from personal experience, it’s much easier said than done. When your rent is due this month, taxes are due next year, and you’ve only got enough for rent... you aren’t gonna withhold 30%. It’s not because you don’t want to, but because you just don’t have the money. Call it poor financial management or whatever you want, but the reality is that lots of people get into this situation. Yet I doubt many of them would blame their clients (or Uber) for the problems. Most would say the government demands too much tax, or they can’t find enough work. Personally I would be in favor of a $30k annual basic income and eliminating all taxes on up to $100k in earnings. It will never happen, but it would be one of the best things to happen to society in a long time.

BitwiseFool 6y ago

I had never considered this angle before. This effort suddenly makes a lot more sense.

gher-shyu3i 6y ago

> Has anyone asked the gig workers how they feel about this? Do they want to be W2 employees? They don't. They had a survey and that's why Prop 22 passed.