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October 18th, 2017

Insight

Let's salute the self-employed --- how they will save the country

Tom Purcell

By Tom Purcell

Published Oct. 21, 2014

Let's salute the self-employed --- how they will save the country

If more Americans were self-employed independent contractors, the country would soar.

Maybe I better explain.

In addition to writing this weekly column, I provide professional copywriting services to a variety of organizations. If they like my work, they give me more and I prosper. If they don't like my work, I go broke.

Thus, the self-employed are at once humbled and motivated to perform their very best.

Being self-employed makes people intimately aware of the negative impact of government regulations and policies.

Some believe that individuals should not have the freedom to exchange their services for money from organizations — some argue that these individuals are being taken advantage of by corporations, so legislation was created to forbid the practice.

As a result, the companies I do work for must bend over backward to prove that I am not in any way serving in the capacity of an employee. My clients hire third-party firms that make me jump through hoops to prove I am not an employee.

I have to submit records and invoices I've sent to other clients, pay for business liability insurance, prove I have my own health insurance, prove I file my tax returns — and on and on. Such are the unintended negative consequences of laws, written by politicians, that are supposed to help people become employees.

Self-employed people know more about taxes than most. Unlike typical employed people, we are keenly aware of how much we pay.



Few full-time employees have any idea of how much they really earn or how much their taxes really are.

Full-time employees are often unaware that their benefits package — health, life, dental and disability insurance, "free" college tuition, workers' compensation insurance, 401(k) matching, etc. — is income. An employee who earns $70,000 in annual salary is probably costing his employer closer to $100,000 total.

Employees are often unaware that their employers must pay half of their 12.4-percent FICA tax (Social Security and Medicare combined). Though half of that 12.4 percent is paid by the employer and half by the employee, many employees have little idea that all of the FICA tax is, in reality, coming out of their pockets.

But I am fully aware of it. As a self-employed person, I pay 15.3 percent (FICA plus 2.9 percent for Medicaid on income up to $117,000). I pay about $1,000 a month — otherwise known as A LOT — to support these programs, but it is not enough because Social Security, Medicare and Medicaid are all headed toward bankruptcy.

Which brings us to health insurance. The self-employed are more aware of ObamaCare than anyone. This is because we have responsibly purchased our own health coverage throughout our careers — only to see premiums soar under ObamaCare. My premiums are now twice what they were a few years ago, since I have to help fund others who cannot afford ObamaCare.

I got a letter in the mail a few weeks ago that said my policy was being canceled because it didn't meet ObamaCare requirements. That was followed by a letter that said I could keep my policy after all. That was followed by another letter that said a rate hike on my policy was just approved.

But I probably am not allowed to learn what my new rates are until AFTER the election.

In any event, CNNMoney.com says the percentage of contract workers is soaring. In 2005, roughly 31 percent of U.S. workers made their income as self-employed contractors. Experts say that number could increase to well beyond 40 percent in the next 10 years.

Which would do our country good.

If more people knew how government policies and high taxes are hurting us, our country would finally do something about it.

That's one job that really needs to be filled.

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