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Thursday Links: Cracking Down on the Independent Contractor Tax Dodge

Posted by: Nick Leiber on February 18, 2010

President Obama’s proposed budget suggests tough times ahead for employers who misclassify independent contractors, Courtney Rubin reports on Inc.

Has the Great Recession ended? Dane Stangler, writing on the Kauffman Foundation’s Growthology blog, takes a look.

In a post on the WSJ’s India Chief Mentor blog, Sanjay Anandaram explains why social entrepreneurship is the “latest victim of feel-good ‘buzz-word compliance.’”

Not a patent troll. In a piece on Harvard Business Review, Nathan Myhrvold says his company, Intellectual Ventures, is misunderstood.

On the first anniversary of the stimulus bill, Newsweek’s Nancy Cook spent the day trying to figure out how the federal dollars flowed through her Brooklyn neighborhood.

Reader Comments

Michael Felberbaum

February 23, 2010 11:31 AM

Interesting about independent contractors. There are so many issues with taxes and independent contractors -- I wonder what the net effect is on entrepreneurship and self-employment in this country...

Carol Cross

February 26, 2010 12:29 PM

It would seem that the government would also be interested in the ever-growing practice of franchising, wherein the franchisees are the small independent contractors, who produce the gross sales of franchise systems,and are responsible for the paymnent of employer taxes.

In Mom and Pop retail franchising, most of the jobs are part time with no benefits and no health insurance or sick pay. Retail franchise jobs are not good American jobs with any kind of future.

Increasingly, even big corporations franchise some of their operations to maximize profits by avoiding the obligations and expense and risk of being employers. If the big corporation can take royalties off of top line revenue and avoid the expense and risk of producing the gross sales, why not?

But, what are the social costs to government of this kind of "independent contracting" when many of the independent contractors within franchise systems fail to thrive and the safety net of WC comes into play? Who picks up the costs? (Look at the janitorial franchise sector wherein there have been so many abuses and even case law that has deemed that the franchisor is actually the employer.)

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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