I pay much more tax than I ever did as an employee. Even though I am certainly more tax efficient. The government certainly makes more money from me than if I was LARPing as a startup business yet had zero customers.
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You might think that "none of that matters" one bit but I think you misunderstand. Somewhere with a thriving contracting/freelancing industry is defacto a "top destination for tech talent". And they collect tax revenue from almost all of these businesses.
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In fact it is harder for small businesses to avoid tax despite what you say since we are unable to pay for high-end offshore corporate accountancy. And much more at risk if we were to do something dodgy and then later on get fined.
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Also, I do think that while there are contractors with weak skills there is an incentive for skilled workers to enter that market. It effectively competes against the startup job market which promises learning opportunities, comfort and quality work.
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This is a good point. Nowadays both are closing the gap. Contracts try to offer learning/quality/comfort, while permanent employment offers higher salaries. They still have an edge on each other but it is getting less clear cut.
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