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I think the notion that people do not get social security credit if they are on 1099 is flawed. People on 1099s pay their half of the payroll tax that would be
by rmk 4y ago
I think the notion that people do not get social security credit if they are on 1099 is flawed. People on 1099s pay their half of the payroll tax that would be incurred by an equivalent W-2 employee. This is known as the "Self-Employment Tax". And it is for funding the Social Security obligations that they owe.
The part that's irksome about California is the personal income taxes. You can check into Hotel California but you can never leave. The FTB has been known to go to ridiculous lengths (it has been alleged that they went digging in people's trash) to collect or otherwise establish a basis for taxing people no longer in the state.
Many startup founders move out of CA well in advance of liquidity events, establishing domicile in FL or some other low/no-tax jurisdiction to avoid the hefty 13+% rate that CA imposes. I'm sure they are advised by very capable (and well-paid) lawyers. It would be nice if regular people could also get this advice for a reasonable price but I doubt it.
I suspect CA will get even more aggressive as the exodus of high income earners continues out of the state.