If I were in city government in, without loss of generality, Chicago, I'd be pushing as quickly as possible for an Office of Remote Employment Promotion and trying to soak up both a) geographically mobile remotes and b) lower barriers of hiring a Chicagoan to epsilon.
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“Might”? For sure it will be; my experience with policymakers is FUD and ego.
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There are some companies that operate in multiple (~all?) states with established tax ids, benefits providers, etc, with the sole purpose of employing _your_ employees to contract them back to you. It feels like that might approximate what you’re after.
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