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The gig economy boosts GDP. If I work as an employee, I am just an expense to a company. If I setup an S corporation and contract my services to that same compa
by kornhole 4y ago
The gig economy boosts GDP. If I work as an employee, I am just an expense to a company. If I setup an S corporation and contract my services to that same company, I am now growing the services sector and increasing GDP. I am still doing the same amount of work but just increasing transactions. I seem to be incentivized by pay and taxes to work as contractor, and this may be because the government is trying to pump GDP.
- ummonk 4y agoNo, if you contract your services to that company, your contribution to GDP gets cancelled out by the intermediate consumption of that company purchasing your services. The GDP is the same either way.
- kornhole 4y agoHow does it get cancelled out? Take this example: Company A has $1M revenue from creating services or products. Then my company B invoices company A for $250K. GDP is $1.25M. I do not report who I billed to the government who compiles GDP. So I don't see how they can not include my services as part of GDP.
- ummonk 4y agoCompany A reports $250K in non-employee-compensation expenses to the government. This intermediate consumption gets removed from their share of the GDP, so the total is ($1M-$250K) + $250K = $1M.