PRO ACT screws the working class
The study uses IRS data from a Treasury study to calculate taxes on a sample of independent contractors. The sample comprises the four different types of independent contractors most likely to be reclassified if the PRO Act became law. The population size is 13.81 million independent contractors with 1099 income, with a sample size of 1 percent. The study assumes that both the independent contractor and the employee take the standard deduction and computes the tax differences from there.
The results are striking. Based on the sample, a nationwide ABC test would lead to 7,749,443 workers paying more in tax as W-2 employees than independent contractors. It is important to note that independent contractors already pay taxes — the reclassification would lead to them paying a different mix of taxes resulting in a higher overall tax burden.
The study uses IRS data from a Treasury study to calculate taxes on a sample of independent contractors. The sample comprises the four different types of independent contractors most likely to be reclassified if the PRO Act became law. The population size is 13.81 million independent contractors with 1099 income, with a sample size of 1 percent. The study assumes that both the independent contractor and the employee take the standard deduction and computes the tax differences from there.
The results are striking. Based on the sample, a nationwide ABC test would lead to 7,749,443 workers paying more in tax as W-2 employees than independent contractors. It is important to note that independent contractors already pay taxes — the reclassification would lead to them paying a different mix of taxes resulting in a higher overall tax burden.