Chiming in on this, its mostly correct, but not a key distinction as wealthy market participants have many tax credits as well. EITC (Earned Income Tax Credit)

Chiming in on this, its mostly correct, but not a key distinction as wealthy market participants have many tax credits as well. EITC (Earned Income Tax Credit) is the majority of their enforcement though, according to IRS agents. The IRS uses a social graph which affects the working class more than others. Basically, if you get paid by someone and that someone deducts the payment on their taxes, the IRS is looking for the recipient (you) to see if the IRS was paid by the recipient to make up for the deduction. So this is done with W-2 employment and 1099 payments. This affects individuals more so because there is no clear guidance on whether 1099 filings are necessary for payments to LLCs and other entities, and there likely never will be. LLC's are not expensive or exclusively the domain of the wealthy, but in practice they are, and the opportunities available to a contractor to act as an individual versus in a corp-to-corp payment situation are pretty heavily correlated to the value of the contract. Just one of many examples of the different experience.