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Our Low-Tech Tax Code

Soulskill posted more than 4 years ago | from the the-taxman-tweeteth dept.

Businesses 691

theodp writes "After establishing that nothing can excuse Joe Stack's murderous intentional plane crash into an IRS office, a NY Times Op-Ed explains the reference in Stack's suicide note to an obscure federal tax law — Section 1706 of the 1986 tax act — which the software engineer claimed declared him a 'criminal and non-citizen slave' and ruined his career. Interestingly, a decade-old NY Times article on Section 1706 pretty much agreed: 'The immediate effect of these [Section 1706] audits is to force individual programmers ... to abandon their dreams of getting rich off their high-technology skills.' Section 1706, the NYT Op-Ed concludes, 'is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law's repeal, it remains on the books.'"

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691 comments

Jews did 9/11 (-1, Troll)

Anonymous Coward | more than 4 years ago | (#31218738)

Remember the WTC!

A day in the life of rms (-1, Troll)

Anonymous Coward | more than 4 years ago | (#31219192)

8am - Wakes up outside the Center for Marxist Education in Cambridge, MA as another bum shits on him. Thinks this sucks and that he would like an apartment, but can't find a landlord with an apartment that is free as in speech and beer. Falls back asleep.
9am - Wakes up again.

9:15am - Goes to men's room at MIT to wash shit off. Discovers that multiple bums shit on him while he was asleep in addition to the one that woke him up. Gives himself sponge bath. Shit comes off (somewhat), but he really isn't clean since he refuses to take a shower. While taking the sponge bath, RMS annoys everyone in the building by singing the free software song.

9:45am - Decides to shave 2 inches off beard after someone in MIT restroom mistakes him for Osama Bin Laden.

10am - Goes to McDonalds for breakfast. Gets into arguement with workers behind counter after they refuse to give him a free as in speech and beer breakfast. Also gets into arguement with the manager about why McDonalds should be called GNU/McDonalds due to the fact that he eats there.

11:30am - After being thrown out of McDonalds since the staff doesn't want a DGH (Dirty GNU Hippy) deterring lunch rush, RMS goes to the McDonalds' dumpster to find food. Eats a "GNU/Quarter Pounder" and "GNU/fries" covered with "GNU/mold". He consideres the food better since it is free as in speech and beer.

12:30am - Goes back to MIT to recruit MIT students into writing free software. RMS is unable to enter anyone's office since everyone has placed spider plants in their offices. (He has a phobia a spider plants.)

1pm - RMS protests BHO (President Barack Hussein Obama) for not being GNU/BHO and believing in copyrights. Wanders out of Cambridge and into Waltham. Police find RMS and arrest him for violating the ordinance that says he is not allowed to enter Waltham. (All towns surrounding Cambridge have this ordinace.) Police beat him and deport him back to Cambridge.

3pm - Goes back to MIT and creates a plan for dealing with overpopulation by killing everyone who uses non-free software. Writes code into next version of emacs to implement that feature

5pm - Tries to read email. RMS finds out he is dangerously over quota due to an email from Doctress Neutopia. This email is 65 megabytes of nothing but ASCII text. It is similar to an email he gets everyday since 1995 when he and Docress Neutopia had a brief fling. The email says that she would like to have a relationship with him, but he needs to accept her lovoution, stop his polygamous goat fucking and clean off the hair, dirt, food, and feces off his keyboard. RMS responds with a 9 megabyte email (of nothing but text) explaining that he could only consider getting into a relationship with her if she changed her name to GNU/Doctress Neutopia. RMS realizes that a 65 megabyte email would not be a problem if he used a service such a GMail. However, RMS thinks about how he will never use GMail or something similar since its software as a service and thus not free. RMS realizes that the 486 computer that is falling apart that he uses for email is better since it is free.

5:30pm - Reads rest of his email. His email is bombarded with trolls, people making fun of him for the Hurd being incomplete, and goatse. RMS is turned on by the goatse and beats off to it.

6pm - Still beating off to goatse

7pm - Still beating off to goatse

8pm - Still beating off to goatse

9pm - Heads to mens' room to take a dump. As he is taking a dump, RMS realizes that he is using Sewer as a service which is not free (as software as a service is not free). RMS is troubled by the idea that as soon as he flushes he loses control of his poop. RMS realizes that he needs to work on a "free sewer" or other free system of poop handling so that people can retain control of their poop even after they flush.

9:30pm - Breaks into MIT vending machine to have a free as in speech and beer snack.

10pm - Breaks into a liquor store for free as in speech and free as in beer beer. Gets drunk.

10:30pm - Walks around Cambridge, MA drunk yelling, "Use free software!!!!", "It's GNU/Linux you capitalist pigs!!!!" and "I am a goat fucker!!!!".

11:45pm - Realizing that he needs a place to sleep for the night, RMS starts banging on the door to the Center for Marxist Education. The Marxists want nothing to do with someone so insane so they don't open the door for RMS. RMS continues to pound on the door so the Marxists out of desperation claim its private property and force RMS to leave. As RMS finishes going down the stairs to the sidewalk, he collapses and goes to sleep.

Was it a cause of his legal trouble? (1)

SnapShot (171582) | more than 4 years ago | (#31218742)

I read the article, but can't figure out how it got him into legal trouble? It sounds like the law makes it less beneficial to be an independent contractor but doesn't explain how it could get Stack into $10,000 of legal fees.

Or, was this just one of a litany of complaints?

Re:Was it a cause of his legal trouble? (1, Troll)

Lehk228 (705449) | more than 4 years ago | (#31218790)

from what i could tell reading the article, the trouble appeared when you tried to run a temp agency that kept everyone as contractors or if you tried to create a temp agency as part of your business and use "temps" to staff your business without paying the requisite payroll taxes. that's what i got from

In passing Section 1706 in 1986, Congress singled out the programmers, engineers, analysts and many other technical workers by mandating that staffing firms no longer be protected by Section 530's safe haven.

considering that the articles' main assertion, that tax law makes it impossible/almost impossible for programmers to work as consultants, conflicts so much with reality, i am ready to file this under the right-wing anti-tax propaganda heading.

Re:Was it a cause of his legal trouble? (5, Informative)

Antique Geekmeister (740220) | more than 4 years ago | (#31218860)

That's not how I read the article. The law creates tax issues for individual programmers who incorporate: if your business has only one employee and is less than one year old, the IRS comes looking for you. And as a matter of policy, the IRS is harassing _the employers_ of such contracting companies. The result is to discourage individual programmers from incorporating on their own.

Partly due to the economic issues lately, I've had _a lot_ of recruiting companies trying to recruit me to leave my work and come help them earn their recruiting fees. It's taken me a lot to stop laughing, sadly, when they say how lucrative it is: salary equal to my current salary, but without benefits or vacation, unemployment, and on a "temp to perm" basis for a company that is already falling apart due to letting their qualified engineers go at the start of the crisis is not a good place to go. I've reviewed the potential for consulting, and while it makes sense for some, it's not the wonderful and economically sound decision that many recruiters would have you believe.

Re:Was it a cause of his legal trouble? (5, Informative)

Gorobei (127755) | more than 4 years ago | (#31219036)

I'm pretty left wing, but I lived through that insanity:

1. The IBM PC had just become a viable business computer
2. Firms had an incredible need for decent programmers
3. Decent programmers commanded pay 2-3 times what was then considered reasonable salary for a recent college grad (i.e. way outside corporate pay scales)
4. Firms had a hard time telling good vs bad programmers apart

so...

5. Firms hire programmers as consultants, pay them market wage, but have the ability to easily fire them by not renewing contracts
6. Programmers self incorporate because that is the only way firms are equipped to pay them
7. Programmers quickly realize that they can write off giant amounts of income as business expenses (travel, meals, home computers, video games, home office space, etc.)

then...

8. Law is passed to prevent this if basically:

a. You claim to be a sole proprietor, and
b. All your billing is coming from a single corporation (i.e. you are really an employee, not a consultant.)

IIRC, I avoided the law by forming a two person corporation with multiple billing streams.

Re:Was it a cause of his legal trouble? (5, Informative)

anagama (611277) | more than 4 years ago | (#31219264)

The other half of the equation is the $60m tax cut that was pushed by Senator Moynihan as a favor to IBM. You were clever and figured out a way to navigate the hurdle caused when congress had to find $60m to offset its favor to IBM (nice work BTW). The problem is, when there are a very few who can simply buy the laws they want via the legalized corruption of campaign donations, cleverness will not always be sufficient to overcome those hurdles.

Re:Was it a cause of his legal trouble? (0)

Anonymous Coward | more than 4 years ago | (#31219024)

His legal trouble was that he didn't pay taxes, instead, he bought items such as planes, and houses. Jeez, if I didn't pay taxes (complaining about being audited) I could afford all that stuff too.

The oped is by (0)

Anonymous Coward | more than 4 years ago | (#31218760)

David Cay Johnston, an investigative reporter for the NYT for 13 years, whose books cover a bunch of this stuff in easily readable detail which I don't get any commission on, damnit. :-)

His _Free Lunch_ just went into HC remainder, which is where I found out about him, it's now in paperback.

Re:The oped is by (1)

jra (5600) | more than 4 years ago | (#31218850)

That was me. And, incidentally, "low-tech" has nothing to do with this. If you read TFA, you'll see that Senator Moynihan was led down the garden path by IBM, whom the section helped to the tune of $60M a year...

Even he renounced the change, but they could never get it repealed.

There's more to this story (4, Insightful)

WaywardGeek (1480513) | more than 4 years ago | (#31218762)

I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits. I think this improved things generally all around. For some reason, full employment creates a bond of loyalty from the employee, and sometimes from the company, which is never there as a contractor. More programmers got health care. It was a good thing.

As a contractor, I was not personally effected, because I was an actual contractor, with multiple clients, self-employment taxes, and all. All you need to not be effected by the law is to be an actual contractor.

Re:There's more to this story (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31218814)

What is to stop a contractor taking out their own health insurance?

Re:There's more to this story (5, Informative)

h4rr4r (612664) | more than 4 years ago | (#31218856)

Cost, lack of coverage for pre-existing conditions and in general the mess that is the US insurance industry.

Re:There's more to this story (0, Troll)

Idiomatick (976696) | more than 4 years ago | (#31219096)

American health care sucking horribly.

Re:There's more to this story (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#31219230)

I assume you're referring to the cost... In every other aspect, America has the highest overall quality health care and is always at the bleeding edge of medical technology - electronic, methodic, and pharmaceutical. This is a statistically proven fact. I do agree if your point is the cost.

For what it's worth, there is a reason the greatest medical professionals from all over the world come to America to train.

Re:There's more to this story (4, Insightful)

jedidiah (1196) | more than 4 years ago | (#31218848)

What are you on?

All this does is give the employee a false sense of security. The corporation is still going to think of you as disposable.

Programmers should be able to buy their own health care without their employer being a part of the transaction.

Re:There's more to this story (-1, Flamebait)

h4rr4r (612664) | more than 4 years ago | (#31218928)

Some of us could not. The reality is the healthcare problems in this country lead to these issues. Yet, if you dare mention another method the teabaggers go nuts.

Re:There's more to this story (0)

Anonymous Coward | more than 4 years ago | (#31218970)

The healthcare problems in this country are *also* caused by tax code problems. So fix one tax code problem by creating another tax code problem?

At some point, we have to stop trying to treat the symptoms and solve the problem at its root. If we keep trying to band-aid and duct tape our problems, china and europe will eventually eat our lunch.

Re:There's more to this story (1, Funny)

Anonymous Coward | more than 4 years ago | (#31219186)

If we keep trying to band-aid and duct tape our problems, china and europe will eventually eat our lunch.

You silly americans think everyone enjoys eating your food.

Re:There's more to this story (1, Funny)

Ultra64 (318705) | more than 4 years ago | (#31219152)

teabaggers go nuts.

Huh huh huh

Re:There's more to this story (-1, Redundant)

h4rr4r (612664) | more than 4 years ago | (#31219280)

at least someone got it.

Re:There's more to this story (1, Troll)

ArsonSmith (13997) | more than 4 years ago | (#31219270)

I know you've been convinced of a healthcare problem in this country, but it's just not true.

Re:There's more to this story (2, Informative)

ArcherB (796902) | more than 4 years ago | (#31218966)

What are you on?

All this does is give the employee a false sense of security. The corporation is still going to think of you as disposable.

Programmers should be able to buy their own health care without their employer being a part of the transaction.

Um, programmers, or anyone else CAN buy health care without their employers being part of the transaction. It's probably going to cost more because when we say that employers are "part of the transaction", that means they are paying for a large part of the transaction. There is no law that says you have to let them.

Re:There's more to this story (0)

Anonymous Coward | more than 4 years ago | (#31219078)

Um, programmers, or anyone else CAN buy health care without their employers being part of the transaction.

Not if they have ever had so much as a sniffle. In which case they become "uninsurable" due to pre-existing conditions.

Re:There's more to this story (5, Informative)

jkgamer (179833) | more than 4 years ago | (#31219214)

Um, programmers, or anyone else CAN buy health care without their employers being part of the transaction. It's probably going to cost more because when we say that employers are "part of the transaction", that means they are paying for a large part of the transaction. There is no law that says you have to let them.

Um! Have you ever tried to purchase insurance for just you and your family? Cost aside, many insurance companies will NOT insure you. Why? Because the risk is there that you will use those benefits. Insurance companies expect that a certain number of employees will NOT use their benefits and generate enough profit to outweigh the expenses of those that do. And if you have ANY pre-exsisting conditions or you've ever smoked a cigarette in your lifetime, they will just flat out deny you any coverage no matter what the cost, as a matter of policy. If you do find some obscure insurance company that will cover you, you can bet your life (not just figuratively speaking) that it will cost you an amount much much more than an employee and his/her employer's contribution for that policy.

Re:There's more to this story (-1, Flamebait)

ArsonSmith (13997) | more than 4 years ago | (#31219314)

Wow you seem to have bought the government takeover of 1/6th of the economy hook line and sinker huh.

Re:There's more to this story (4, Interesting)

cduffy (652) | more than 4 years ago | (#31219258)

It's probably going to cost more because when we say that employers are "part of the transaction", that means they are paying for a large part of the transaction.

A few items:

  • Individuals cannot be turned down (in the US) for membership in an employer-sponsored group. They can be turned down for individual insurance, and between 20 and 40% are.
  • See "risk pooling", and its impact on pricing; for "high-risk" individuals (like me, for having a 100% benign growth removed five years ago), this has far more impact than the presence or lack of an employer's partial payment into a plan.

Re:There's more to this story (4, Insightful)

HangingChad (677530) | more than 4 years ago | (#31218896)

At the time, many large companies were switching to having huge numbers of contractors instead of regular employees.

It's true, there were a lot of companies abusing the private contractor exemptions. Many were doing it blatantly.

But now it's a handicap. There have been many times I could have stayed on with companies as a sub-contractor but they were afraid of getting dinged by the IRS.

We need something in between the wild west days when everyone was a contractor and what we have today. There has to be a better solution.

Re:There's more to this story (0)

Anonymous Coward | more than 4 years ago | (#31218916)

Being a contractor myself, I would disagree with your statement that full employment creates a stronger bond of loyalty between the employee and the company. My experience is that quite the opposite is true: while I see most fellows contractors really giving good value to the company that hires them, I also see quite a few employees taking their sweet time getting things done. But maybe "getting things done" is not what loyalty is all about ...

Re:There's more to this story (1)

h4rr4r (612664) | more than 4 years ago | (#31219034)

More likely the taking their sweet time is doing the job right, while you and your cohorts half ass it. Contractors and Consultants realize they will not be around for the long haul so any solution they offer will be tuned to their own talents to prevent them from having to learn anything and suitable for the length of their stint and not maintainable after. Time and time again I have seen this pattern, if someone is not going to be around in a year, why bother having something that will still work in a a year?

Re:There's more to this story (1)

Stiletto (12066) | more than 4 years ago | (#31218938)

I pretty much begged my current employer to classify me as a contractor instead of a full-time employee when I signed up. If it wasn't for the horrible job market when I was hired, I would have probably walked and found a company willing to play ball.

I've been tech contracting on and off for years, but never heard of this law. Does it affect the contractor directly or only the company contracting with them?

Lower than what?? (4, Insightful)

SuperKendall (25149) | more than 4 years ago | (#31218962)

I remember when this law was passed. At the time, many large companies were switching to having huge numbers of contractors instead of regular employees. Uniformly, these companies denied any benefits, like health insurance. Job security was also lower. I personally did a lot of contract work at the time. After the law passed, the big companies were forced to hire most of those contractors, with benefits.

I remember that too. That was during The Bubble.

And then after the bubble? Why most of those people were laid off. Only instead of being able to get by with smaller amounts of work the way mot people do, they spent years unemployed because they couldn't contract anymore and they couldn't find permanent work either.

I don't know why on earth you would say "job security was lower" because contractors at least always had a defined term of work and only in the most extreme circumstances would you be able to get rid of them even if you as an employee thought they sucked. Meanwhile at any moment Hammer Of Rightsizing could come down on you as an employee.

As for healthcare, there are a lot of people with spouses also working that can cover the health angle or you can opt to go with the catastrophic coverage (still pretty cheap) along with the tactic of setting aside something more than the $2-$3k deductible in a medical savings plan. Then you are covered for the big things but also can do the small stuff too if you want.

Re:There's more to this story (2, Interesting)

Hurricane78 (562437) | more than 4 years ago | (#31219104)

Uuuummm... Yes. That’s why in Germany, it is illegal to be a “contractor” with only one single client. Which means you already have to start with more than one, to not become illegal when starting your self-employment.

I never got why anyone would work as a contractor for only one client anyway. Isn’t the whole point of being a contractor, that you have more than one client, and that if one of them is a dick, you can say fuck you, and still work for your other clients? (= “fire one of your bosses”)

Re:There's more to this story (2, Insightful)

newdsfornerds (899401) | more than 4 years ago | (#31219150)

The loyalty is always on the part of the employee. Corporations are legally obligated to be loyal only to stock holders.
The interests of the company and its investors always trumps any concern for employees.
You're dreaming if you think otherwise.

Re:There's more to this story (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31219242)

"After the law passed, the big companies were forced to hire most of those contractors, with benefits. I think this improved things generally all around"

Then 10 years later all those jobs... were in Mumbai.

a golden key for brigandry (1)

ncmathsadist (842396) | more than 4 years ago | (#31218766)

This maundering plea says if you have been ripping someone off for a long time, your ripping off is "acceptable," and therefore it should be sanctioned. What sophistry! Perhaps we can let every drug dealer with ten years of experience off the hook for all illicit activity, past and future? How about mass murders in cold cases? Can they keep on murdering since they already got away with it? Clearly, these companies are trying to circumvent their (minimal) responsibility as employers. They should pay what they owe and shut the hell up about it.

Can someone who understands the IRS explain? (1)

Opportunist (166417) | more than 4 years ago | (#31218774)

I even settle for "I get the gist of it", given that it's tax law we're talking here and the last person understanding that went into an asylum a few moments after he has been illuminated.

Since that pretty much might apply to me under certain circumstances, what the hell does that mean?

Re:Can someone who understands the IRS explain? (5, Insightful)

maxume (22995) | more than 4 years ago | (#31218818)

Do you mean 'criminal and non-citizen slave'?

Or 'is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law's repeal, it remains on the books.'?

The gist of it is that the 1986 law withdrew a special exemption for high tech workers, along with a whole bunch of other tax shelters (the law is most hostile to individuals that work full time using resources provided by a company and with supervision from an employee of the company, while claiming that they are a corporation doing contract work for the company).

Re:Can someone who understands the IRS explain? (5, Informative)

KiahZero (610862) | more than 4 years ago | (#31218876)

I'm not a tax attorney, but I do know a little about the situation. Here's a brief summary:

There's a lot of concern over how to classify workers as either "employees" or "independent contractors." Each has its own pros and cons, but in general, it's better for a company to consider its workers as contractors from a tax perspective. Because taxes are radically different based on how an employee is classified, a misclassification that is turned up by the IRS can be very expensive for a company. As such, there is a "safe harbor" which protects companies who have a reasonable basis in considering an employee to be an independent contractor.

There was a sense this was being abused in the technology industry in the 1980s, and as such, Congress amended the law. The amendment didn't change the classification system of employees versus independent contractors, but did remove the safe harbor. As such, companies became much more reticent to hire a worker as an independent contractor, because the penalty for getting it wrong was much more likely to be assessed.

Re:Can someone who understands the IRS explain? (4, Insightful)

Eskarel (565631) | more than 4 years ago | (#31218996)

Basically, it's a duck law. If it looks like a duck, quacks like a duck, and walks like a duck it is a duck.

If you work for one company long term, doing what is essentially a full time position, then you are an employee whether you want to be or not and are entitled to things like health care and you employer is required to pay payroll taxes. It doesn't matter if you call yourself a consultant or work out of some sort of shonky staffing agency, and more importantly it doesn't matter if your employer calls you a consultant and hires you through some shonky staffing agency.

In theory it's to protect the rights of workers so they get all the benefits of full time employees if that's what they are, however in reality it's to close a tax loophole. Ya see the thing is generally speaking capital gains tax is less than income and payroll tax. Consultants running their own companies generally pay capital gains on most of their income whereas employees pay income tax and their employers pay payroll tax, which generates more revenue for the government. The extra benefits for employees are nice too, but that isn't really the goal.

Now the thing about this law is that if you actually are a consultant(you know, changing clients regularly, working for multiple clients, or doing work that isn't standard 9-5 work) none of this affects you, you're still a consultant and you still get the pluses and minuses of that arrangement. If you're not really a consultant(more than a year at the same place, no additional clients, doing what would normally be a salaried position) then your employer has to treat you as an employee. This means paying payroll tax, health benefits, 401k if applicable, which is of course expensive. Generally speaking if this happens a company decides to either get a real consultant or get a real employee. If they make you a real employee it generally means a pay cut(since they're paying all those benefits) and essentially the end of the little consulting business you had going.

Now none of this is in and of itself a problem, people who were being exploited got their proper benefits, the tax man got his money, and real consultants weren't affected. The problem is that some people are either stupid or lying to themselves. They want all the stability and routine of a salaried position with the higher salary, lower taxes, and theoretical freedom of a consultant. Essentially they want to be consultants without incurring any risk. This, of course, doesn't work because the loser in this relationship is the government who gets fewer tax dollars, and everyone who does the right thing since they're paying extra tax to make up for you dodging yours.

There were a few problems because of people who really couldn't face doing either real consulting or real employment(which this guy seems to be one of with the whole slave thing) or who invested a lot of money and time into their business shell even though they weren't actually using it. All in all it's a fair law though, real consultants stay consultants, real employees stay employees, people who are in the wrong category get moved to the right one. Everyone pays the taxes they owe.

The moral of the story is that consultants get higher pay and lower taxes because they incur higher risk(a consultant/contractor may or may not have work at any given time and has pretty much zero protections) and you can't get rid of the risk and still retain the other benefits.

Re:Can someone who understands the IRS explain? (3, Informative)

maxume (22995) | more than 4 years ago | (#31219030)

How are contractors realizing capital gains? Are they 'creating' software and then transferring ownership of it?

Re:Can someone who understands the IRS explain? (1)

Eskarel (565631) | more than 4 years ago | (#31219168)

Because self employed contractors run companies, they have to for legal and tax reasons. The earnings(at least in large part) of your company can then be transferred to you via capital gains.

It's like Bill Gates doesn't draw a salary from Microsoft, but that doesn't mean he's not making money.

Re:Can someone who understands the IRS explain? (1)

maxume (22995) | more than 4 years ago | (#31219252)

Are you speaking from personal experience? This contradicts my understanding of what a capital gain actually is (which could well be the problem).

Re:Can someone who understands the IRS explain? (1)

fwr (69372) | more than 4 years ago | (#31219288)

I'm no expert on this, but I suppose you can look at it like this. A "real" contractor is not just doing work for a company 9-5 for long periods of time (many months or years). Part of what a "real" contract has to do, by definition, is invest some capital into the whole self-owned business. They have to do a certain amount of sales work. They don't get paid for that. When they land a contract, the business is getting paid to do a specific job. They take their "salary" out of the price for that contract, and the rest goes to cover the business costs (home-office, work computers, sales, etc). It can reasonably be viewed that any leftover dollars after paying for the business is viewed as capital gains over what it cost to fund the business itself. I think that is reasonable. Now, I work for a large engineering consulting company. It is not a one-man show for me, but the concepts are the same. Some may argue that it does take one-man show independently owned consultants many months or years to work on large projects, but I agree with other comments that the only honest jobs that take that long are huge jobs that a larger consulting company would engage in, not a lone engineer / programmer. One guy working at a company for two years doing 9-5 work, whether programming or some other consulting work, is I believe just a way for both the business and "consultant" to cheat the system. If a company were to hire many one-man consulting firms to fill a need for a "team" of independent consultants over the long term, it becomes even more transparent that they are just trying to cheat the system. I think the guy was nuts, and was by definition a terrorist.

Re:Can someone who understands the IRS explain? (0)

Anonymous Coward | more than 4 years ago | (#31219146)

Dude, consultants pay *more* tax, not less. They have to pay income tax, plus the full 12% Medicare tax, not the usual 6% paid by employees.

Re:Can someone who understands the IRS explain? (1)

Eskarel (565631) | more than 4 years ago | (#31219246)

Individually they may pay more taxes(depending how they structure the company of course), but remember you pay tax for earning income and your employer pays tax for paying you, and they add up to quite a lot.

Re:Can someone who understands the IRS explain? (0)

Anonymous Coward | more than 4 years ago | (#31219176)

"Now the thing about this law is that if you actually are a consultant(you know, changing clients regularly, working for multiple clients, or doing work that isn't standard 9-5 work) none of this affects you, you're still a consultant "

The problem is that because of this law, most companies won't hire you even if you are a real consultant. They won't take the risk that the IRS will disagree with them and fine the company.

Re:Can someone who understands the IRS explain? (1)

Eskarel (565631) | more than 4 years ago | (#31219218)

There isn't really that much risk so long as you're a) short term or b) have multiple clients.

Last I heard the period you had to fall under for this was a full year of exclusive employment. A full year is a damned long time to be consulting for just one company.

Re:Can someone who understands the IRS explain? (1)

trout007 (975317) | more than 4 years ago | (#31219250)

The problem is if you want to become a consultant. It is impossible. To be hired as a consultant you need to be a consultant. To be a consultant you need to have more than one client. To have more than one client and you are starting out you need to start with one client. If you only have one client you are an employee not a consultant. It is similar to many cartels. The existing consultants want to prevent competition so they pass a law banning people from being considered consultants. There are many states that have licensure laws where in order to get the licence you need to be approved by people already in the industry. So the people in the industry get to decide if you are allowed to compete with them. Complete BS. The Institute for Justice routinely battles these laws. http://www.ij.org/ [ij.org]

Explanation here (0)

Anonymous Coward | more than 4 years ago | (#31219016)

Easy.. There's always been a difference between employee and independent contractor. ICs provide their own tools, workspace, set their own hours, etc., and typically have a defined "product" that they are delivering, although the contract might be a "time and materials" one. Employees are provided a place to work, told when to be there, and are paid for showing up (either by the hour or by the day/week).

there was concern that a lot of the contractors were essentially "de-facto" employees, but weren't necessarily paying their taxes as self employed people (essentially, you got paid cash, and the company didn't much care whether you filed Form SE or not)

Why so many contractors? There was a lot of work for programmers in that time and a lot of tech companies in the 80s had a large number of toilers who sat at company provided desks, used company provided terminals connected to company provided mainframes, working company mandated hours. The employees (paid salaries) sat next to contractors who were essentially being paid by the hour (straight time, no OT). The hourly rates were high, because they typically came out of a "other direct cost" bucket and didn't have a lot of overhead applied when the job cost accounting was done (e.g. contractor fees didn't include anything for office space, heat light, etc. in addition to vacation and sick time.. obviously, a contractor doesn't consume the latter, but they sure consumed the former). This made contractors, even at a high hourly rate, a very good deal to the project manager.

If you were young and single, who cared that you had to buy your own health insurance (or go bare)... it was lucrative. ANd the temptation to not make those quarterly estimated tax deposits (or even file your return) was very great. You get checks in the mail, you cash them, you spend the cash, you get your next job.

Remember, this is back before "telecommuting" existed in any meaningful sense (ah, the days of 300bps acoustic couplers!). YOu pretty much had to be physically present at the place the computer existed to do the work. SO there was some workplace friction too, someone making 30K/yr salary would be sitting next to someone doing pretty much the same work for $50/hr, and worse, when the schedule got tight, and everyone pulled all nighters, the contractor got paid, and the employee got bupkis.(except that they'd get an award plaque or certificate at the end of the year for "devotion to the company"..until they were laid off).

The companies also did worry about the Independent contractor audit thing, but ultimately, they solved that by requiring that contractors be incorporated (you had to have an EIN, not a SSN, to get the work, and to get paid).

SO you had a sort of confluence of factors: managers loved having no-burden toilers; employees didn't like seeing contractors making 5 times what they were; big staffing companies were losing out, because unlike low end clerical help, programmers and engineers were more than willing to fork out the $500 to incorporate; So the solution was: Let's fix this horrible tax cheating problem (which didn't actually exist) and solve a bunch of other problems.

So 1706 came into being.. supposedly providing a brightline test for Independent Contractor and a safe haven for the big company (hire your contractors/temps from an agency, and you're golden).

Re:Can someone who understands the IRS explain? (2, Informative)

w3woody (44457) | more than 4 years ago | (#31219128)

All Section 530 does (which the 1706 amendment exempted programmers, drafter and other similar technical people) is to make it easier for employers who hire independent contractors to protect themselves of the "contractor" fails to pay his taxes. Someone who works for another can easily file a form with the IRS claiming that in fact they were an employee, not a contractor--and that could cause an employer to be subject to an audit and owe employment taxes.

By exempting programers and drafters and other technical people from section 530's 3 point test [irs.gov] to determine if you are a contractor, it simply means programmers must satisfy an older pre-section 530 20 point test [tmc.edu] to determine if a programmer is in fact a contractor.

It's not hard under the current legal regime to become an independent contractor. Hell, I was an independent contractor all through the 1990's. All it requires is that you basically provide your own tools (such as a computer, the compilers, and the like), you set your own hours, and you have a contract with your current employer specifying the work to be provided. You don't even need to satisfy all 20 points--you simply need to show that certain things (such as being paid hourly) is common in the software development industry. (And in my case I also did a few fixed-priced contracts as well, which established a history that I was an actual contractor.)

Re:Can someone who understands the IRS explain? (1)

w3woody (44457) | more than 4 years ago | (#31219162)

Where'd my links go? (*sigh*) The IRS Section 530 3 point test [irs.gov] , and the pre-530 20 point test [tmc.edu] which currently applies to software developers, drafters and other technical people.

things are different now than in the 80s? (0)

Anonymous Coward | more than 4 years ago | (#31219208)

"It's not hard under the current legal regime to become an independent contractor. Hell, I was an independent contractor all through the 1990's. All it requires is that you basically provide your own tools (such as a computer, the compilers, and the like), you set your own hours, and you have a contract with your current employer specifying the work to be provided."

Not hard *today*. Pretty challenging in 1984. pretty tough to be slinging that Ada code on your PC or Apple II. AutoCAD was a godsend in the 80s, because it made it feasible to be a self employed draftsperson.

Yo dawg (0)

Anonymous Coward | more than 4 years ago | (#31218780)

I pretty much see the whole of America, and the whole of Europe as giant cattle pens, full of cows ready for milking
The loopholes all you to "project" your services into these countries, but not have to worry about the details of high tax regimes. High tax is for cattle.

Doesn't work with physical objects that have to pass though customs though, and it looks like the man is about to clamp down on the so called "amazon tax".
No tax freelance/consultancy work FTW.

Sounds familiar? (4, Insightful)

Opportunist (166417) | more than 4 years ago | (#31218852)

From TFA: In an earlier interview, Tom Burger, the director of employment taxes for the I.R.S., said one of the agency's difficulties ''is that, and I need to pick my words carefully, Congress passes laws, often without asking us about them, and then tells us to enforce them.''

Translation: Politicians make laws without knowing jack about the consequences and not even bothering to ask those that could tell them what kind of can of worms they are about to open. And then they're too pussy to admit they blundered.

Sounds familiar? A law gets passed that should cure some problem with the economy and the only thing it accomplishes is to cause troubles where there were none before while the problem continues to exist.

If I get that right, the law aimed at eliminating the "fake freelancing", where companies pretty much forced programmers into freelancing instead of hiring them, resulting in cheaper labour for them and shifting the risk and insurance burden on their not-quite-really-employee. Now, that still exists, with programmers now being passed about like slaves by temp agencies where they enjoy little less risk or much more insurance while at the same time losing their freedom entirely, while those companies still get the cheap programming labour they wanted, and at the same time the whole deal also keeps those programmers that are good and sought after enough to actually be (really) self employed and successful at it from actually being this.

Sounds very familiar...

Stack was right about that (0)

transporter_ii (986545) | more than 4 years ago | (#31218926)

What you say may have been part of it, but Stack nailed it. Companies paid in all their taxes regularly. When it was pushed to the private contractors, they had to make quarterly estimates.

The burden went from one big company, to a lot of little contractors. The IRS preferred the steady stream of money from the big company, vs the irregular quarterly estimates from a lot of contractors, who may or may not be being honest about everything.

Making everyone work for a company was part of their goal, but I'm not sure how many thought about the temp slave thing, you mentioned. That was probably just a fringe benefit for them.

I'm sure it was a HUGE difference. (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31219022)

Those...few thousand of contractor filings vs. a few dozen business filings. Surely that was enough to drive this law, right? After all, when the IRS is handling 140 Million taxpayer submissions, those few thousand documents were breaking them.

I think you are trying too hard to make this about the big bad IRS. Seems that this special condition for contractors was repealed to prevent corporations from skating on health care and to foster company loyalty. After all, too much employment thrashing is bad for the economy's efficiency.

Re:I'm sure it was a HUGE difference. (2, Interesting)

anagama (611277) | more than 4 years ago | (#31219070)

The law was in the main part, a $60m tax break favor to IBM. The effect on ind. contractors was the manner in which IBM's tax cut was funded. Nobody was thinking about consequences. Moynihan was simply doing a $60m favor for IBM.

I don't get it (1)

swb (14022) | more than 4 years ago | (#31218864)

I know a half-dozen guys that work as independent programmers and have generally only heard good things about their experience, excluding times of no work and shitty projects. I've never heard of this law or anyone impacted by it.

What's the deal?

Re:I don't get it (0)

Anonymous Coward | more than 4 years ago | (#31218894)

I would assume this is like IR35 in the UK - if you work on contract to multiple companies at the same time, with contracts that are generally 6 months or less, you are OK. However, if you are employed as a contractor by a single company for a period beyond 6 months, then the tax authorities might decide that you are in fact a permanent employee and decide to come after you for additional tax.

What is wrong with this, I hear many people say - the issue is this is a tax exemption that specifically targets one industry (why does it not apply to other self-employed businesses), and also only applies to the small guys - for instance in the UK, contractors are no longer entitled to claim training etc. as legitimate business expenses, whilst the bit IT agencies are free to do so - setting an unlevel playing field.

An ex-IT contractor from the UK who bailed because of IR35, so I know a bit about this.

Enjoy corporatism (2, Informative)

unity100 (970058) | more than 4 years ago | (#31218868)

this is how it happens :

- you let individuals or groups to amass unlimited wealth

- eventually some reach the wealth level with which they can influence democratic processes or representatives

- the first individuals or groups to reach the above level start protecting their interests in lieu of everyone else

- laws do not work against this, because if you can influence democracy and its representatives, you can MAKE laws, as in the current example we are discussing (contract law)

- 'the people' get the shaft

The more interesting part (4, Informative)

anagama (611277) | more than 4 years ago | (#31218878)

The more interesting part of the tax provision was that it was introduced by Patrick Moynihan as a favor to IBM. A $60m tax cut type of favor. I'm not saying Joe was right in what he did, but it is rather apparent that to be noticed by government, you must either be insanely rich or insanely violent.

Re:The more interesting part (4, Insightful)

Dunbal (464142) | more than 4 years ago | (#31218930)

but it is rather apparent that to be noticed by government

      Speaking of which, I notice an uncanny lack of reporting over this incident. It exploded across the internet, but not really through the formal news channels. CNN, which covered the plane crash of a fighter jet into a residential neighborhood for DAYS with live footage, etc, only mentioned the crash briefly in their reports and on their website had only one small link that took you to the story.

      But oh God, Tiger Woods just farted so let's dedicate a good 25% of each hour to THAT.

      It's hard to avoid thinking that the government somehow "asked" the press to downplay this, and the press is complying. Just like you never really hear about the WARS anymore... This is the New World Order. Hell if it wasn't for the internet, all the news we'd get would be about Angelina, Brad and Tiger.

Re:The more interesting part (5, Insightful)

freeweed (309734) | more than 4 years ago | (#31219202)

Well, let's face it - Stack was a white American, so you can't drum up the "damn Islamic foreigners" angle.

Plus, he's demonstrated quite nicely just how pointless most airport security is these days. I'm pretty sure he didn't have to go through a full-body scanner, and yet once again a terrorist has managed to crash a plane into an office building.

Some random Arab kid screws up even *trying* to crash a plane, and it's news for weeks, with subsequent major overhauls of government practices and even the President getting involved. Some random white American SUCCESSFULLY crashes a plane, into a civilian target, and we get a brief mention one night. Double standards, what are those?

I was also disappointed that Slashdot didn't post anything at the time (at least, this is the first story I've seen). Guy was a computer programmer, so there's the nerd angle. Plus, this site has been obsessed with any story hinting of this since 9/11.

Re:The more interesting part (3, Interesting)

fishexe (168879) | more than 4 years ago | (#31219212)

Speaking of which, I notice an uncanny lack of reporting over this incident. It exploded across the internet, but not really through the formal news channels. CNN, which covered the plane crash of a fighter jet into a residential neighborhood for DAYS with live footage, etc, only mentioned the crash briefly in their reports and on their website had only one small link that took you to the story.

Are you watching the same media I am? My CNN (you know, the one on the actual TV, not the one in your head) had nothing but the Stack crash for several hours on the day that it happened, including live footage of the outside of the building for as long as that was available. Then continued to mention it several times every time I've turned CNN on since then. MSNBC and Fox News have been covering it quite a bit as well.

But oh God, Tiger Woods just farted so let's dedicate a good 25% of each hour to THAT.

That's a good point. But when they also devote 30% of every hour to Stack, that pretty much kills your argument.

It's hard to avoid thinking that the government somehow "asked" the press to downplay this, and the press is complying.

Ok, now you're just trolling. We've already established your premise is false.

Food Inc (0)

transporter_ii (986545) | more than 4 years ago | (#31218880)

I watched Food Inc last night. In it, they said E. coli H157 could be removed from the intestinal tract of factory farmed cows by giving them grass for around five days. Instead of looking to see if there was a problem with the system, they expanded the current system in an effort to get rid of the E. coli, which didn't work.

While watching it, that is exactly what I thought about what will happen with Joe Stack. Instead of stepping back and asking if there could be a problem with the IRS, they will expand the system in order to "fix" the system.

I saw they were going to look at cracking down on small plane owners, as if that would have helped. Yeah, a flight plan would have stopped him, and he was a freaking engineer. Yeah, good luck with that.

I was getting something to eat and it was on TV. A guy walked by me and said rather loudly, for being in mixed company, "he didn't destroy that building enough!"

Wow, maybe if they treated people with more dignity and respect -- you know, like people -- maybe there wouldn't be that sentiment.

Re:Food Inc (0)

Anonymous Coward | more than 4 years ago | (#31218978)

I watched Food Inc last night. In it, they said E. coli H157 could be removed from the intestinal tract of factory farmed cows by giving them grass for around five days. Instead of looking to see if there was a problem with the system, they expanded the current system in an effort to get rid of the E. coli, which didn't work.

While watching it, that is exactly what I thought about what will happen with Joe Stack. Instead of stepping back and asking if there could be a problem with the IRS, they will expand the system in order to "fix" the system.

I saw they were going to look at cracking down on small plane owners, as if that would have helped. Yeah, a flight plan would have stopped him, and he was a freaking engineer. Yeah, good luck with that.

I was getting something to eat and it was on TV. A guy walked by me and said rather loudly, for being in mixed company, "he didn't destroy that building enough!"

Wow, maybe if they treated people with more dignity and respect -- you know, like people -- maybe there wouldn't be that sentiment.

Wouldn't matter. Nobody in the history of the world has ever liked the rent man / Tax collectors.

Looks like Joe was right... (0)

Anonymous Coward | more than 4 years ago | (#31218898)

...When he said that nothing changes without a body count.

Double-Standard (5, Insightful)

Anonymous Coward | more than 4 years ago | (#31218902)

Substitue "Mohammed al-Mohammed" for "Joe Stack" and "Section 1706 of the 1986 tax act" with "United Nations General Assembly Resolution 46/86" and you'll see what you folks are all doing - you're making up excuses for a terrorist because he happens to share your political views. This guy was a fundamentalist libertarian terrorist.

Re:Double-Standard (0)

Anonymous Coward | more than 4 years ago | (#31218944)

"This guy was a fundamentalist libertarian terrorist."

A domestic terrorist? Yep.

A guy who is a "fundamentalist libertarian" who rambles through a rant with beefs against everyone under the sun and then closes with praise of communism and derision of capitalism?

Um, not so much.

Re:Double-Standard (5, Insightful)

h4rr4r (612664) | more than 4 years ago | (#31218976)

This AC needs modded up.

Just because the guy hated the same things as other libertarians that does not make him less of a terrorist nutbag.

Re:Double-Standard (2, Insightful)

ArcherB (796902) | more than 4 years ago | (#31219084)

This guy was a fundamentalist libertarian terrorist.

BZZZZTTTT! Libertarians don't go around quoting Marx.

Sorry. Try again.

Re:Double-Standard (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31219174)

This guy was a fundamentalist libertarian terrorist.

BZZZZTTTT! Libertarians don't go around quoting Marx.

Sorry. Try again.

Read his essay. He had a lot of propaganda in there, but the biggest message was one of anti-government. Libertarians are all about the minimization or even removal of the state to maximize personal freedoms.

Re:Double-Standard (0)

Anonymous Coward | more than 4 years ago | (#31219244)

Read his essay. He had a lot of propaganda in there, but the biggest message was one of anti-government. Libertarians are all about the minimization or even removal of the state to maximize personal freedoms.

Libertarians want the minimization of the state, but only a small fraction of those who want the minimization of the state are libertarians.

Most anarchists are radical communists who reject capitalism, at complete odds with libertarianism.

Re:Double-Standard (3, Interesting)

Ardeaem (625311) | more than 4 years ago | (#31219206)

This guy was a fundamentalist libertarian terrorist.

BZZZZTTTT! Libertarians don't go around quoting Marx.

Sorry. Try again.

Glen Beck goes around quoting "progressives." Does that make him a progressive?

Re:Double-Standard (0)

Anonymous Coward | more than 4 years ago | (#31219268)

Glen Beck goes around quoting "progressives." Does that make him a progressive?

No, but it does make him an unhinged fringe element just like many of the people he's quoting.

Re:Double-Standard (0)

Anonymous Coward | more than 4 years ago | (#31219102)

I'm not making up excuses for anybody; what this guy did was simply inexcusable. However, it can be useful to understand his situation and reasons for the attack (even if they are misguided). As an example, we're waging a war in the middle east right now that is going to solve absolutely nothing because we are attacking the symptom instead of the cause. Maybe the tax system can be fixed so people don't feel as helpless as this guy apparently did.

Re:Double-Standard (2, Interesting)

TheSpoom (715771) | more than 4 years ago | (#31219154)

So we can't objectively identify whether or not he had a point?

Obviously terrorism is evil and should be stopped, but it doesn't mean we should shut off our brains.

Re:Double-Standard (3, Insightful)

anagama (611277) | more than 4 years ago | (#31219164)

Was he a "fundamentalist libertarian"? His manifesto laments the state of health care in this country. He bashes organized religion, though I think that may be residue from his attempt at one time to start a religion as means of not paying taxes. Lastly, he may have had libertarian leanings, but if so, I'd doubt he was a fundamentalist -- fundamentalists become republicans because of their desire to control people while Libertarians would rather leave people alone. Somehow, I think you are having a knee jerk reaction and stringing together every term you find derogatory.

Re:Double-Standard (3, Insightful)

freeweed (309734) | more than 4 years ago | (#31219254)

I bet Stack didn't even have his water bottle confiscated at security. No wonder he was able to crash a plane!

The IRS is not a *kind* organization... (0, Troll)

micklang (1750620) | more than 4 years ago | (#31218910)

A 'tax code' larger than the King James bible, certain rights in a courtroom that flaunt what the average Joe Citizen is allowed to have-- how can the common human ever hope to challenge and win? The IRS has owed me over $2,000.00 for years now and even though I have filled out the required form and that the time to file a request for payment won't expire, I've received nothing. I've lived outside the US since 1994 and STILL have to pay taxes (in both countries now). It could be said that I officially pay for two separate governments. I know what I'm paying; all IRS staffers, my brother's Earned Income Credit (since he's paid under the table), while countless companies and rich folks pay nothing for tax credits. I think that most people would agree that our current tax system is hugely unfair, yet nothing will be done about it. Mr. Stack apparently had enough and took it out on the organization that made his life most miserable. I would not equate him with a terrorist, but as a man who chose to commit a criminal act. Terrorists don't care who they kill, so long as the body count sensationalizes their cause. If he truly was a gifted programmer, he would have tried to find a way to hack into IRS employee email addresses and send them to 'questionable' porn sites instead. I hope at least this brings a spotlight on the IRS' activities and they get raked over the coals for how they treat people. After all, more people have committed suicide over desperation (when dealing with the IRS) than have been killed by Mr. Stack.

Re:The IRS is not a *kind* organization... (1, Troll)

ArcherB (796902) | more than 4 years ago | (#31219108)

The fix is simple. Federal sales tax. Period.

No IRS. No tax code other than a percentage and what items will remain tax free (food, medicine, etc).

Good luck getting it repealed now (3, Insightful)

Weaselmancer (533834) | more than 4 years ago | (#31218932)

If it was part of this nutjob's manifesto, now if Congress repeals the law it will look like the government can be swayed by terrorism. Since the government never ever wants to appear to be that way, this law will now have to remain on the books forever.

Way to go.

Re:Good luck getting it repealed now (1)

Dunbal (464142) | more than 4 years ago | (#31218958)

it will look like the government can be swayed by terrorism.

      Nah, it was just a tax paying citizen making his complaint heard. No need to label him a "terrorist". He didn't want Israel out of Palestine, or fellow terrorists released from jail, etc. His "manifesto" isn't a manifesto, it's a suicide note. Sure, turn him into something evil if you want, but he was a desperate guy 50 years old staring a bleak future in the face in the land of opportunity, and he decided he didn't want to live it.

Re:Good luck getting it repealed now (2, Insightful)

h4rr4r (612664) | more than 4 years ago | (#31219082)

If he was so desperate and just wanted to end it, he could have eaten a bullet on the steps of the building. Same message, way less risk to others.

He wanted to be a terrorist, he just did not do a good job of it.

Re:Good luck getting it repealed now (3, Insightful)

Dunbal (464142) | more than 4 years ago | (#31219114)

Call it what you will. You push people hard enough and eventually they start pushing back. I see an interesting future for the US - the "land of the free" where 12 year olds are arrested for writing on school desks. Very interesting indeed. Will they still be terrorists when they are fighting and dying for your rights?

Re:Good luck getting it repealed now (4, Insightful)

rarel (697734) | more than 4 years ago | (#31219142)

No need to label him a "terrorist".

Attack with deadly force on civilian targets for a political motive. The guy wanted to go out with a bang taking as many as he could. It's not "just" suicide. And now GA faces even more restrictions because of that nutjob, as if there weren't enough. You know what? Fuck Joe.

Re:Good luck getting it repealed now (0)

Anonymous Coward | more than 4 years ago | (#31219188)

crap I messed up the blockquote code (>_<) sorry

Re:Good luck getting it repealed now (0)

Anonymous Coward | more than 4 years ago | (#31219040)

If it was part of this nutjob's manifesto, now if Congress repeals the law it will look like the government can be swayed by terrorism. Since the government never ever wants to appear to be that way, this law will now have to remain on the books forever.

Way to go.

A law that enables employers to abuse employees as independent contractors is a bad law. May I suggest if you want to be a real contractor you do it the right way instead of flying your plane into the IRS.

US Programmer wages? (0)

Anonymous Coward | more than 4 years ago | (#31218984)

As a European, I get the impression that wages for programmers in the US are way higher than in Europe. Like 3 times higher or more. Like e.g. people who are working only a few years, already getting $70000 a year. Is my impression correct?

Re:US Programmer wages? (1)

minsk (805035) | more than 4 years ago | (#31219074)

Yes and no. I don't think $70K with a few years experience is unheard of, but it's also outside the normal distribution.

Many companies are in places with absolutely mind-numbing costs of living. Many also seem to realize that non-professional development experience is still valuable. The combination of the two can make the salaries for some "new" programmers pretty impressive.

Re:US Programmer wages? (0)

Anonymous Coward | more than 4 years ago | (#31219170)

How far do you think 51,000 Euros would go in, let's sat, Berne?

Tip of the iceberg or just another wing nut? (4, Interesting)

swb (14022) | more than 4 years ago | (#31218994)

The question I have is whether this guy is the tip of the iceberg or whether he's just another wing nut who can't admit when he's lost whatever argument he got in.

He does make some complaints in his screed about the kinds of issues that even rational people are worried about -- big government, big corporations and a "system" that feels stacked against individuals; some of these issues have been kicking around among conspiracy theorists and paranoids forever, yet a Treasury run by ex-bankers that loans out a trillion dollars to bankers and others who make sure the banks get paid is only too real.

Is unemployment and the rest of it going to create more of these guys?

Re:Tip of the iceberg or just another wing nut? (1, Informative)

Anonymous Coward | more than 4 years ago | (#31219018)

Simple answer: Yes

Re:Tip of the iceberg or just another wing nut? (1)

srussia (884021) | more than 4 years ago | (#31219048)

Sorry to say I told you so:

http://slashdot.org/comments.pl?sid=1498344&cid=30658998 [slashdot.org]

Re:Tip of the iceberg or just another wing nut? (1)

maxume (22995) | more than 4 years ago | (#31219094)

The U.S. has a rich history of angry citizens attacking society, it isn't anything new.

Re:Tip of the iceberg or just another wing nut? (1)

maxume (22995) | more than 4 years ago | (#31219052)

There are only so many people that have the ironic composition of despair about their financial futures, thousands of dollars to spend attempting to fight tax classification that isn't that onerous and a private plane.

You owe taxes if you are a "non-contractor" (3, Informative)

originalhack (142366) | more than 4 years ago | (#31219038)


The issue with this would impact someone who forms his own contracting firm and starts to deduct business expenses like getting from home to the job site, home office costs, etc... If he is later declared to be an employee, all those deductions get disallowed and he owes the back taxes. I suspect that, if he incorporated and paid himself mostly by distributions, he also paid his taxes at capital gains rates instead of the wage rates. That's a privilege restricted to lawyers, doctors, financial consultants, investment fund managers, and corporate officers.

Now, originally, the law's effect would have been balanced by the way that it kept companies like Microsoft and IBM from just making everyone a contractor to remove benefits, but the corporation quickly figured out that they could use temp agencies as a middle-man. It wasn't until a major lawsuit in the late 1990s that companies became sensitive to the idea that if it walks like a duck (employee) and quacks like a duck (employee), then it is a duck (employee) that can sue you for benefits. After that suit, many companies started brining contractors back on the payroll to avoid later class action claims.

Boo hoo (4, Insightful)

tylersoze (789256) | more than 4 years ago | (#31219110)

Yeah this poor guy could only afford a nice house and a plane. Just imagine, without that terrible law, he could have been able to afford a two engine plane and a slightly nicer house!

irrational or rational response? (3, Interesting)

Alan R Light (1277886) | more than 4 years ago | (#31219296)

I was traveling through airports when I happened to see this story on the news, so I haven't caught up on all the details, but one thing disturbed me: the lying heads went on and on about how mentally disturbed this man must have been, and how could we identify such mentally disturbed people in the future, but never once did they ponder whether this was a rational response to an untenable situation. Never once did they question the role of a convoluted, maddening, and probably illegal tax code.

It is difficult living in a country where there is little rule of law because the multitude and complexity of laws makes virtually everyone eligible for a felony conviction at the arbitrary whim of unaccountable government officials. If Mr Stack had run into such persecution his response may well have been the only rational one. What other avenues were open to him to escape from the situation? Good riot police know that they should never cut off an angry crowd's escape routes, as they will have no choice but to fight, and most of us have heard of the dangers of a cornered animal, but what opportunities did Mr Stack have to avoid what he (probably accurately) described as a kind of slavery?

In short, if Mr Stack had no viable alternatives, or if he was feeling especially patriotic, this response may not have been irrational. If all his friends and colleagues never suspected that he was insane, it may be because he wasn't. The fact that his suicide note was angry and used profanity does not necessarily mean that Mr Stack was mentally unbalanced - it may simply mean that he had good cause to be angry. If someone tried to enslave you, would you be angry? Would you say some naughty words? If so, does that mean that you are wrong or mentally ill to object to being enslaved, or does it mean that the bastard who is trying to enslave you is wrong?

The fact is, all Americans have become or are becoming the slaves of the United States government, which in turn has become the instrument by which those who take more than they give (at present 60% of Americans) have harnessed the productive classes for their own benefit. This is the tyranny of the majority, and it looks like it will only increase in the future. Talking to people overseas, I have met many who envy American wealth but none who envy American "freedom".

The fact that the lying heads on the News never addressed this question concerns me. The American media is no longer interested in discovering the truth, they merely do the bidding of their employers - and with the U.S. government being the largest advertiser, guess who their employers are? It may well be that Mr Stack really WAS crazy, but we will never learn the truth from the media.

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