Our Low-Tech Tax Code

theodp writes "After establishing that nothing can excuse Joe Stack's murderous intentional plane crash into an IRS office, a NY Times Op-Ed explains the reference in Stack's suicide note to an obscure federal tax law — Section 1706 of the 1986 tax act — which the software engineer claimed declared him a 'criminal and non-citizen slave' and ruined his career. Interestingly, a decade-old NY Times article on Section 1706 pretty much agreed: 'The immediate effect of these [Section 1706] audits is to force individual programmers ... to abandon their dreams of getting rich off their high-technology skills.' Section 1706, the NYT Op-Ed concludes, 'is an example of how Congress enacted a discriminatory law that hurt thousands of technology consultants, their staffing firms and customers. And despite strong bipartisan efforts and unbiased studies supporting that law's repeal, it remains on the books.'"

Comments

Re:Was it a cause of his legal trouble?

[einhverfr]

Still, that's a different situation. While you work, you get a steady paycheck. Most of my projects are less than a week long, occasionally I have some projects that are bigger, but if I have enough work to last me for 2 months, I am happy.

I also get to deal with:
  1) Collecting from problem customers.
  2) AR aging issues (I might in some cases get paid 30-60 days after the work completes)
  3) Billing by milestone (I might do several weeks of work and then have to wait a month to get paid)

The basic thing is that even while I am working I have no guarantee that the next month I will be able to pay my bills. It usually works out, but we have had a few very difficult months and had to call folks and delay all sorts of bills.

Re:Was it a cause of his legal trouble?

[einhverfr]

I wasn't talking about just being a contractor. If you do a few big projects, you have the same job security as an employee.

If you do a lot of smaller projects, it is a very different thing.

Most of the projects I do are under 40 hours. Many are under 20 hours. My income is based on the volume of sales and work. That means some months, income goes down even though I am still self-employed.

The closest thing I can draw on in comparison was my experience as a dishwasher at a college cafeteria in the summer before entering the high-tech industry. My hours would vary one week to the next because it depended on how many conferences the college was hosting. Sometimes I would get 35 hours (on a good week) and some I would get 10 (on a bad week).

If you are a programmer, chances are you are not going through this boom and bust process if you are an employee. As an independent consultant, OTOH, that is a normal life.