Comments on: How financiers are like illegal construction workers http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: ARJTurgot http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15112 Sat, 22 May 2010 18:59:17 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15112 You guys spent way too much time in formal schools. Most of the labor trades and crafts guys I know that are 1099 enjoy serious tax breaks. Pay ’em in cash, get a minimum of 25% off, and since they are only reporting maybe 50% of what they make, it still nets out well.

It could be hysterically funny, not that any Democratic politician would sign on for it, to require documentation of taxes paid on earnings as part of any amnesty program.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15077 Fri, 21 May 2010 12:36:45 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15077 @OnTheTimes: Correct, except that 1099 workers pay the full employee and employer rate, but get a deduction for half of the employer rate (just like your employer does).

@pschaeffer: Felix is not referring to aliens or immigrants, legal or not. This discussion is about those who work for employers as independent contractors (“undocumented” in terms of not on company payrolls, and not being eligible for unemployment insurance). Many construction workers do so, and apparently many financial salespeople also.

If a 1099 worker goes to the same office on a daily basis as company employees, and uses company facilities and equipment, he or she should probably be a W2 employee by law, although the law is sporadically enforced.

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By: pschaeffer http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15065 Fri, 21 May 2010 05:08:55 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15065 Felix,

If you want to be taken seriously, don’t use PC evasions like “undocumented”. These aren’t folks who accidentally dropped their U.S. passports somewhere in the desert.

They are illegal aliens. Yes, I know that “illegal immigrants” is a common phrase. However, U.S. law defines an immigrant as a lawful permanent resident of our country. Hence you can not be an “illegal immigrant” under U.S. law.

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By: OnTheTimes http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15058 Fri, 21 May 2010 02:39:03 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15058 strychn9, getting paid via the 1099 does not mean you pay tax at the capital gains rate. It means your employer does not pay any social security taxes or health insurance, because technically they are not your employer. If you are paid via the 1099, you actually have to pay 1.5x the normal social security (FICA) tax, because you have to pay half of what an employer would be paying.

Getting paid via 1099 does allow you to deduct some business expenses, but not all kinds of workers can take advantage of it. If you can find health insurance, you can deduct the expense, but most likely you will pay a lot more as a single client than an employer will pay for group coverage, even after your business deduction. A 1099 working arrangement does not automatically mean tax savings, only for those who know how to game the system.

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By: HBC http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15055 Fri, 21 May 2010 01:49:32 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15055 Oh come on, Felix. Financiers are like a lot of repulsive things but I’d take illegal construction workers over most run-of-the-mill financiers any day.

At least illegal construction workers can build stuff, not just tear it down.

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By: southbynorth http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15054 Fri, 21 May 2010 01:15:51 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15054 This post reflects the common mistake of equating receipt of unemployment insurance with unemployment. In the U.S., at least, they are not the same.

The data cited by Mr. Salmon in his original post appear to be payroll employment figures derived from the Bureau of Labor Statistics’ Current Employment Statistics series. This series has nothing to do with individuals persons who are covered by state unemployment insurance systems or who may or may not be receiving benefits.

In fact, in the U.S. relatively few unemployed workers actually are eligible for insurance benefits.

So, taken together, the two posts essentially mix “apples with oranges” and confuse rather than clarify the original point that Mr. Salmon was trying to make.

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By: jobo http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15045 Thu, 20 May 2010 22:45:38 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15045 @Strych09 –
I think you’re confusing it with other types of 1099’s.
http://en.wikipedia.org/wiki/IRS_tax_for ms

Being paid on a 1099 –
I pay all FICA/Medicare both the employer and employee part. I pay all health insurance, retirement, and business costs. I get some deductions associated with it but it’s nowhere close to a free ridge. I have to file a schedule C.

I can’t speak to finance workers – but there’s a lot of tech workers on 1099’s that are barely making it. If it’s a tax dodge than there are lots of us that didn’t get the memo.

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By: jobo http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15044 Thu, 20 May 2010 22:40:18 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15044 The independent contractor/consultant 1099 is also a widely used tatic in the internet, software, tech industries.

Lots of people after the dot com bust have been working on 1099’s – full time or more. So they never show up on unemployment rolls when their contracts aren’t renewed and they’re jobless. I’ve been working on 1099 for several years now and currently am hunting for new work since the contracts have largely dried up and so many people are competing for so few contracts.

Some companies have lowest rate contract bidding where you’re “invited” to participate. One such contract for a large company that makes laptops and printers among their many services had one of these where the final winning rate was $30 an hour for a contract worth about $20,000. Whoever “won” – I hope they had a spouse with health insurance and could cover the mortgage.

Even worse are the set amount contracts. We will pay X for this piece of work – regardless of how many hours it takes. Once you’ve billed that many hours – that’s all the money in the contract regardless of how much work is left to do – and the contracts are always underfunded…

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By: Strych09 http://blogs.reuters.com/felix-salmon/2010/05/20/how-financiers-are-like-illegal-construction-workers/comment-page-1/#comment-15042 Thu, 20 May 2010 22:29:24 +0000 http://blogs.reuters.com/felix-salmon/?p=3942#comment-15042 Are we supposed to feel sorry for these people because they can’t draw unemployment benefits when they are (all to infrequently, it seems) laid off? If so, let me go on record as not shedding any tears for them.

They draw their income via 1099 instead of W2 because it’s a tax dodge, or at least the people that I know who work at hedge funds do so for that reason, if I’m not mistaken If I’m correct, the reason for drawing your income in the 1099 category rather than the w2 category is that the 1099 category is taxed at the capital gains rate, which is substantially lower than the regular rate, no?

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