Are contractors taxed less than companies in the US? In France, companies also like to contract out a lot, either to "freelance" or regular outsourcing shops.

Are contractors taxed less than companies in the US? In France, companies also like to contract out a lot, either to "freelance" or regular outsourcing shops. The reason I put freelance in quotes is that there's no such thing here, legally. You have to have some form of company, through which you invoice the client. But then, whenever you want to get the money out of the company to pay rent and eat, you'll be hit by, more or less, the same taxes the employer would pay. For a given unit of work, it's not cheaper to contract out, there's no real tax loophole. As far as I know, the state doesn't really care. It may even prefer it, since contractor rates are usually higher than salaries, so they get to get more tax. The only situation where it would crack down on this is if the would-be employee complained. Since this is considered a "precarious" arrangement, if the contractor can prove that they're basically an outsourced employee, they can ask to be converted to an actual employee and the state will back them up.