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The government prefers W2 workers because their taxes are automatically withheld by their employer, creating a predictable revenue stream for the IRS and decrea

The government prefers W2 workers because their taxes are automatically withheld by their employer, creating a predictable revenue stream for the IRS and decreasing the risk of tax avoidance (including accidental avoidance, like when a worker fails to save money for taxes). Beyond simple monetary risks, a citizenry of 1099 workers poses a threat to government power, because the citizens can collectively choose to withhold their taxes. When taxes become a tool for collective bargaining, government revenue can fluctuate at the whim of social movements. Imagine a population of 1099 workers where half of the electorate refuses to pay taxes in order to protest the policies of the government in power.

everforward 3y ago
W2 provides some niceties for the IRS, but the government could easily require income withholding on 1099's. > Imagine a population of 1099 workers where half of the electorate refuses to pay taxes in order to protest the policies of the government in power. Half of the citizens being pissed off enough to not pay taxes is an issue for the government, but I don't think the money itself is an issue for the government. They can seize any money you put into a digital payment network, probably including Bitcoin if they can blacklist your address/coins. They can stop printing and deprecate cash, so you have to use a digital payment network. Hell, they can just print more if they have to. You're threatening to withhold tickets from a Chuck E Cheeze. You would need to set up a parallel economy that didn't function on USD or federally-regulated banks. You certainly could if 50% of the population wanted to participate.
PopAlongKid 3y ago
>The government prefers W2 workers because their taxes are automatically withheld by their employer, There is no guarantee that the tax withheld will actually be enough to cover the actual tax liability, so that is an unsupported claim. >accidental avoidance, like when a worker fails to save money for taxes Nothing "accidental" about it, at least not after the first year. Then it is cheating where the taxpayer hopes to take advantage of generous forgiveness or delay programs built into the system (such as Offer in Compromise) hoping to eventually run out the statute of limitations clock. >a citizenry of 1099 workers poses a threat to government power, because the citizens can collectively choose to withhold their taxes. Again, a completely unsupported claim. First, millions already do evade taxes and it has not yet reduced government power. The government can print and/or borrow money longer than the tax cheats can withstand it. The government can file liens against property and levy other payments to get the money from most places where the tax cheats try to hide it. The government can also require those who pay independent contractors to withhold on those payments (similar to employers), in addition of course to the mandatory reporting of such payments. Also, those who prefer being employees (because that is almost always a better deal for the worker - for example, unemployment insurance, minimum wage, paid sick leave) would probably object to their fellow citizens, working as ICs, cheating on a massive scale.
mariodiana 3y ago
> Imagine a population of 1099 workers where half of the electorate refuses to pay taxes in order to protest the policies of the government in power. Is that a missing verse from the John Lennon song, because I like it.
GenerWork 3y ago
>creating a predictable revenue stream for the IRS This is the biggie. The IRS absolutely HATES the idea of uncertainty. It's why last year when I started doing my taxes and initially had a refund in excess of $1000, my tax software popped up a warning saying that there's a heightened chance I'd be audited.
- abduhl 3y ago
  >> The IRS absolutely HATES the idea of uncertainty. It's why last year when I started doing my taxes and initially had a refund in excess of $1000, my tax software popped up a warning saying that there's a heightened chance I'd be audited. Is it? Did your tax software's warning say "Your tax refund is in excess of $1,000.00 and the IRS hates uncertainty so you've got a heightened chance of being audited"? If not, what leads you to believe that one thing has anything to do with the other? Why is the IRS's purported aversion to uncertainty (assuming that this aversion even exists) the most likely cause in your mind rather than something else? It seems like you probably had some other things going on in your taxes: "According to filing season statistics reported by the IRS, the average tax refund in the 2023 tax season—for tax year 2022—was $2,753. The average direct deposit tax refund was slightly higher than the overall average, at $2,827." https://time.com/personal-finance/article/average-tax-refund https://time.com/personal-finance/article/average-tax-refund
- yieldcrv 3y ago
  Your tax software is scaring you into a protection racket because apparently even their cognitively included customers misattribute it to the dastardly IRS instead of the tax software corporation charging a protection racket Make enough money and you’ll realize the IRS helps you not pay them

everforward 3y ago

W2 provides some niceties for the IRS, but the government could easily require income withholding on 1099's. > Imagine a population of 1099 workers where half of the electorate refuses to pay taxes in order to protest the policies of the government in power. Half of the citizens being pissed off enough to not pay taxes is an issue for the government, but I don't think the money itself is an issue for the government. They can seize any money you put into a digital payment network, probably including Bitcoin if they can blacklist your address/coins. They can stop printing and deprecate cash, so you have to use a digital payment network. Hell, they can just print more if they have to. You're threatening to withhold tickets from a Chuck E Cheeze. You would need to set up a parallel economy that didn't function on USD or federally-regulated banks. You certainly could if 50% of the population wanted to participate.

PopAlongKid 3y ago

>The government prefers W2 workers because their taxes are automatically withheld by their employer, There is no guarantee that the tax withheld will actually be enough to cover the actual tax liability, so that is an unsupported claim. >accidental avoidance, like when a worker fails to save money for taxes Nothing "accidental" about it, at least not after the first year. Then it is cheating where the taxpayer hopes to take advantage of generous forgiveness or delay programs built into the system (such as Offer in Compromise) hoping to eventually run out the statute of limitations clock. >a citizenry of 1099 workers poses a threat to government power, because the citizens can collectively choose to withhold their taxes. Again, a completely unsupported claim. First, millions already do evade taxes and it has not yet reduced government power. The government can print and/or borrow money longer than the tax cheats can withstand it. The government can file liens against property and levy other payments to get the money from most places where the tax cheats try to hide it. The government can also require those who pay independent contractors to withhold on those payments (similar to employers), in addition of course to the mandatory reporting of such payments. Also, those who prefer being employees (because that is almost always a better deal for the worker - for example, unemployment insurance, minimum wage, paid sick leave) would probably object to their fellow citizens, working as ICs, cheating on a massive scale.

mariodiana 3y ago

> Imagine a population of 1099 workers where half of the electorate refuses to pay taxes in order to protest the policies of the government in power. Is that a missing verse from the John Lennon song, because I like it.

GenerWork 3y ago

>creating a predictable revenue stream for the IRS This is the biggie. The IRS absolutely HATES the idea of uncertainty. It's why last year when I started doing my taxes and initially had a refund in excess of $1000, my tax software popped up a warning saying that there's a heightened chance I'd be audited.

abduhl 3y ago
>> The IRS absolutely HATES the idea of uncertainty. It's why last year when I started doing my taxes and initially had a refund in excess of $1000, my tax software popped up a warning saying that there's a heightened chance I'd be audited. Is it? Did your tax software's warning say "Your tax refund is in excess of $1,000.00 and the IRS hates uncertainty so you've got a heightened chance of being audited"? If not, what leads you to believe that one thing has anything to do with the other? Why is the IRS's purported aversion to uncertainty (assuming that this aversion even exists) the most likely cause in your mind rather than something else? It seems like you probably had some other things going on in your taxes: "According to filing season statistics reported by the IRS, the average tax refund in the 2023 tax season—for tax year 2022—was $2,753. The average direct deposit tax refund was slightly higher than the overall average, at $2,827." https://time.com/personal-finance/article/average-tax-refund https://time.com/personal-finance/article/average-tax-refund
yieldcrv 3y ago
Your tax software is scaring you into a protection racket because apparently even their cognitively included customers misattribute it to the dastardly IRS instead of the tax software corporation charging a protection racket Make enough money and you’ll realize the IRS helps you not pay them