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Obamacare, Taxes, and the Law of Unintended Consequences

I was having breakfast with my Brother this past Saturday.  He is a small business owner, (and a very smart dude in general).  He has more than 50 employees.  I was asking him what he is going to do to mitigate Obamacare.  He told me that he was going to make them all independent contractors.  That started me thinking.  If he makes everyone an independent contractor, he will be paying them the gross salary, and it will be each of his independent contractor”s responsibility to pay all taxes on the gross income.  So say an employee makes $80,000, and figuring 30% for taxes (I know that is low) equals $24,000 per year.  No one, Republican nor Democrat alike likes to give the government money.  And for all his bloviating, not even Warren Buffet.  The key here is that they will have to figure out what they owe the IRS and pay it.

If other employers use this tactic to mitigate the nightmare of Obamacare, there are going to be a great deal of employees having to calculate and pay their taxes as opposed to the automatic deduction currently taken from their paychecks (which is, other than Social Security, the greatest scam ever).   All those people that are now independent contractors will know just how much taxes they are paying the government on a very visceral level.  And with Obama, ever the spender, they will no longer be the low information voter, especially if all those extra IRS agents hired for Obamacare come knocking because they are late with, or miscalculated a tax payment.  We all know how reasonable the IRS is.

In a way this would be a good thing.  For once, people would realize just how much of our money the government is taking.  And what they are getting in return for their taxes, and I’m not going there…..

P.S: Moe Lane, love your posts, you rock sir!

 

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