Slashdot Mirror
Independent Programmers' No-Win Scenario
snydeq writes "Fatal Exception's Neil McAllister writes about the no-win scenario facing today's independent programmers: 'In a knowledge economy, programmers rank among our most valuable workers, yet the current legal and regulatory climate makes a career as an independent software developer virtually a dead-end prospect.' Section 1706 of the 1986 Tax Reform Act, the hurdles and costs of obtaining health care for one's own family, a hostile legal climate in search of accountability for any defects in code — these harsh realities make it 'easy to see why software developers would give up on entrepreneurship. For many, the risks simply don't match the potential rewards. Better to keep their heads down, not rock the boat, and hope they can hang onto their jobs until retirement.' Great news for big software vendors, which will be 'ensured an endless supply of programmers desperate for the safe haven of a steady paycheck, predictable taxation, health benefits, and a shield from civil prosecution when their code turns up buggy. But where will the next Microsoft come from? A field that discourages self-reliance sends the message that the status quo is the highest goal.'"
its much better to work for some huge soulless corporate pig where everything you create is owned by the pig and all you get is a measly salary and the pig gets richer and fatter while you wonder if you have enough to retire on at 65
Politics is Treachery, Religion is Brainwashing
I'm willing to take my chances being an independent. I do it every day of the year.
I do well building a reselling software. I make most of my money off something I built two years ago. Working as an independent programmer for someone else may suck, but working for yourself is the only way to go. Build it once, and get paid forever.
This article is more than 10 years late... is this just because the dude crashed his plane into the IRS building?
Most programmers/IT people have long gotten around this by having multiple contracts and/or multiple employees. It's not really all that hard, and if your independent company only has one contract and one employee you're basically already working for them.
This does not in *any way* discourage the next Microsoft. Or the next Google or Facebook, BTW... obviously, since both came up after this law ;)
An operating system should be like a light switch... simple, effective, easy to use, and designed for everyone.
The corporations use bribes to buy politicians. The politicians write the laws the corporations wants. And the laws the corporations want are protective laws which discourage indepdent businesses (programmers or otherwise).
It doesn't matter whether we're talling about RIAA, Hollywood, Comcast, or Microsoft. It's all the same operating procedure.
Corporations should have their free speech rights taken away (lobbyists/bribes).
They have no more rights than a Tree or a rock.
They are not THINGS not people.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
As an independent tech worker today who runs his own company developing my own software products. I have health insurance, and I'm not worried about this clause of the tax law which *strictly* governs consulting with third parties and has nothing to do with your typical tech startup. Your premise that entrepreneurship is in any way damaged by this clause is utterly and totally *wrong*. There MAY be a small minority of independent contractors who, because they work an *extensive* amount of hours for *one* customer the tax law is saying "Sorry, no, you're an employee not a contractor." But the VAST majority of entrepreneurial-minded independent PROGRAMMERS are NOT impacted by this law, and I wish you folks would stop spreading FUD about it.
And no, Joe Stack was not some kind of anti-IRS hero... he was a tax cheat who blamed everyone else for his problems.
When I started working as a programmer some 15 years ago I had an AA degree in computer science. I learned on my own and wrote some pretty fantastic code. My first job was to write a multithreading app and I did well. Now I'm out of work and I can't get a job doing stuff that I could do in my sleep because I don't have a BA and I'm 54 years of age. I can't get a job, in a month or two I'll be homeless. I have pneumonia and I can't even afford to go to the doctor, stinking california denied my medical aid because I didn't state whether i was PREGNANT or not!!! Recently I decided my only hope is to go into business myself and now i read about this situation. Not a day goes by that I don't think about suicide and can only manage to get to sleep by pretending I'm dying. How pathetic I know but that's the way it is. Its over for me.
www.Migrainesoft.com - Computer giving you a headache? We can fix that!
But where will the next Microsoft come from?
Nowhere, hopefully.
In all seriousness, this is typical of the point of view that only large, publicly-owned companies matter and that consumers are just a resource to be harvested by investors in the stock market. Personally, I care a lot less about where the next near-monopoly comes from than where the next generation of quality software comes from. And since it's generally not coming from the existing large corporations, TFA is at least correct in saying that the disincentives to independent development are a bad thing. But this is primarily a bad thing for consumers; there are always plenty of opportunities for the investors, though any given industry -- such as software -- may not be a hot deal at any given time.
Proud member of the Weirdo-American community.
I wonder if it'd be easier for independent software contractors to simply move to Canada, and then contract with US-based companies, doing work remotely?
>>>Most all other occupations face the same challenges and pitfalls.
No. The U.S. Congress passed a law that specifically targets programmers. Quoting a previous slashdot article: "Section 1706 of the 1986 Tax Reform Act. Under the law, certain classes of workers, including anyone who engages as a "computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work," are considered de facto employees for tax purposes, regardless of whether they claim to operate their own businesses as independent contractors. The IRS can impose significant tax penalties on companies who hire such workers as contractors rather than full employees, a fact that can make it extremely difficult for self-employed programmers to find work."
An engineer can be independent designer, and yet still find work with someone like Lockheed.
A programmer who is an independent will not be hired, due to Lockheed being afraid of the IRS punishment.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Yes, working in a group makes it easier than working by yourself.
Thats why companies exist, they can be more productive and efficient than a single person if they properly pool resources and talents.
Accountability in code defects? Lawsuits? Are you fucking kidding me? What universe do you live in where this is happening? Certainly not the one with Microsoft or Toyota in it.
Hold on to their jobs until retirement? Yes, the industry is no longer a fledgling industry. Yes businesses are getting better at figuring out who is actually useful as a programmer and who just happened to pass some courses at the college they went to. The article confuses the industry coming of age and realizing how useless most of the people who claim to be in it are and people not being able to hold on to a job.
People get fired because they are less valuable than something/someone else that can replace them or the need for them has simply went away. Yes companies try to cycle through low cost employees as a way to cut costs, but they end up moving so slowly after a short period of time that they disappear quickly and account for a small percentage of the workforce.
Reality:
Working independently and competing against people who work in groups is generally hard. Doing it as a programmer is no different than doing it as a plumber, with one exception. The plumber isn't so retarded as to expect it to be any different nor do they have the sense of entitlement to think that it should be different for them.
Plenty of people DO go it alone. Happens constantly all the time. The company I work for actually works with more self employed people than companies.
Its not impossible, it just takes effort and is harder than working for a company with shared resources. Yes there are some silly laws aimed at software developers working on their own, but there are also some silly laws aimed at plumbers working alone. God, slashdot would just keel over dead if governments started requiring developers to be licensed and show they are qualified to do so like MANY MANY other professions.
I have a better question:
Why is it IT people in general feel that they are somehow different than everyone else in the world? Are they really so ignorant and socially dysfunctional to not realize that they are no different than any other part of society in any way? Is this ignorance or a form a geek elitism, thinking that we geeks can't possibly be expected to suffer under the same working conditions of the rest of the pathetic planet of idiots?
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
It's funny how all the big-business fat cats claim that "socialized healthcare" is bad for SMALL business, when yeah... lack of affordable self insurance is the PRIMARY reason many dreamers never give their nagging small business idea a go...
If you're going to move somewhere for it, you might as well move to some cheaper country and where they don't require one-man online startup's to take health care or any other high expenses and complicated things.
Hell, you'd probably find a nice island somewhere and can code at your beach house (right after you've gone morning surfing and taking some sun). Not Hawaii though, that place is expensive.
I was an independent contractor/developer for over 15 years and it was great. However, the dive in the economy and the items mentioned in the original post have squeezed things so much that large contracting organizations are swallowing up all the work and forcing independent contractors to roll over or hit the road. It doesn't matter what you know or how valuable to their clients. Decisions are made from the top of the organizations and middle management has little or no say about it.
I've been in software development for over 30 years and have always kept my skillset crisp and current. I've worked as W2 and 1099 over the years and I like 1099 much better (eg. no politics, focus on the task at hand rather than on corporate culture, more say in what and how I do things, etc.). However, unless corporations begin to operate like small companies (where the end product and customer satisfaction matters rather than maximizing share price at any cost), I don't see much hope for the future of independent developers. That is if making a good living matters. Granted, to some $$$ is secondary to enjoying what you do, but those of us with kids to: put through college, help with healthcare, supplement income due to the crappy job market, etc, it matters more than personal satisfaction.
Sometimes the light at the end of the tunnel is the headlight of an oncoming train.
Step 1. Form an LLC. It's not hard, you can do it yourself for under $100 in most cases
Step 2. Get an EIN number from the feds. Free and easy
Step 3. Open a checking account for your new LLC. might require a credit check.
Step 4. Get a decent accounting package.
Step 5. Keep track of EVERY business expense. Keep milage logs in your car. Keep receipts. What percentage of your utilities, etc are business related? Track it.
Step 6. If you think you need the additional coverage get E&O Insurance. It can be pricey, true. On the other hand if you LLC doesn't have a lot of hard assets, why worry?
Step 7. Get health coverage. We found insurance through a local trade group for $600 a month for my wife and I. Pay it out of the company, it's a write off.
Step 8. Work your ass off and enjoy the benefits of being able to write-off things you probably would have purchased anyway.
This should have been step 6 - get a good tax guy (or girl) to help you figure shit out.
Now get creative. Like to go to theme parks? Set up another LLC and create a website dedicated to reviewing them, talking about which ones have what etc. Now you get to write off trips to Six Flags and Cedar point as legitimate business research.
Life is far more enjoyable when you do what you want, when you want, for whom you want. All the accounting is a pain in the ass, yes, but not as big of a pain in the ass as working for Bill Lumberg the rest of your life.
I still cannot find the droids I am looking for...
Panama, the Bahamas, Canada. Citizenship can be had elsewhere. If I was starting a company tomorrow, I'd incorporate offshore, hire offshore and only make my software available via download or as a web app. The USA/IRS might try and tax me for domestic downloads. Good luck with that guys.
If the USA wants to make it difficult for independent software developers or other independent entrepreneurs to do business in the United States, I'm sure that those independents will be happy to oblige them - by taking their money, talents and ambition elsewhere.
Please do not read this sig. Thank you.
We damaged or destroyed the music industry.
We could do that to lawyers and judges as well.
Considering their general low quality, they could in most cases be replaced with simple machine intelligence and data mining. Do this with open source and collaboration, and they will be displaced just like peopled stock exchanges.
Of course there will be a transition period, but when computer guided actors playing lawyers in court rooms win significantly more cases than real lawyers, and computers are better at judging than judges, people will treat them as the obsolete guild they are. The survivors will be lawyers that understands computing.
Kim0
This is an obvious move by the large software manufacturers to keep their monopoly, that's how large corporations create unbearable situation for anyone who maybe able to compete, they create enormous barriers of entry.
Large corporations lobby the government to get what they want, be it bailout money, interest rate free money, laws that discourage competition, unfair advantage for taxation etc. It's the same old 'struggle of the classes', just moved to a slightly different plane - keeping your tools of production away from you, so that you would be forced to go work at the factory. Marx was wrong about what capitalism is, he mixed the term with mercantilism, but he was right in some principle things: those who have capital want to be the only ones with it, to make sure that it is so, they will do their darnest to be the only ones who have means of production so that the rest are forced to work for them and be paid a wage. Wage slaves.
I work as a contractor since 15th of January 2001, never looked back (worked in Toronto most of the time), the laws in Canada are better for this than in the US. US definitely sucks balls in this particular instance. Tomorrow maybe my last day with a company I worked with for 4.5 years, that's my longest contract yet.
You can't handle the truth.
He was a fucking tax cheat not an independent programmer.
Got a complex or what? Given the audience I'm probably gonna burn some Karma here but, There are a dozens of professions I would put before programmers, maybe even hundreds, as the most important professions in civilization, regardless of development level (Nomadic, Agrarian, Industrial, Information). Lets start with Doctors. I'd value my health far higher than a program to balance my checkbook. Next Nurses, as I value my health to have doctors, Nurses are a critical component to make that happen much more than a web browser. Next, Civil Engineers, as I value having a roof over my head (rather than living in cave), clean potable water in my pipes, sewage lines and treatment plants, roads to move myself and goods on and bridges to cross bodies of water and ravines much more than a value software for digital pictures. Next Mechanical Engineers, I'd value cars, planes, boats and machinery to make things, machines to move goods and people, machines to build things and simply to provide an industrial economy much more than a software of any kind. Next, pretty much the rest of the traditional engineering professions. Next Any military career, as I value the defenders that prevent others from taking my life, loved ones or lively hood much higher than software to play games.
I could go on, but I'd put software programmers near the bottom of the list as the most important professions in civilization. Anyone putting software developers near the top of most important professions frankly has a mental disease involving some sort of superiority complex. Personally I'd rank software developers right up there with Telephone Sanitizers, Hair dressers, salesmen, middle managers and Executives on the most important to civilization.
Spend $50k to $80k on a degree.
Get a job with required overtime, required holiday work, low status, poor dating prospects.
At least you used to have freedom, security, and high pay.
Now you've lost freedom (sarbanes oxley is horrific. at my company, a one line change requires review and approval by multiple people (including me as I'm a supervisor).
You lost your security since so many jobs are being offshored (at my company we are down about 35 people and up about 80ish indians onshore and probably another 150 indians offshore.).
And lately, you've lost the high pay. I have friends who only make about $58k a year. That's about $46k after taxes but let's say $48k. Interest on the college debts is $4k a year. How do they live?
Stay away from computing for corporations. It's a terrible job right now. Perhaps things will be better once the dollar falls enough or enough baby boomers retire.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Yes, but the stereotype is that the care that Canadian citizens receive comes slower and is of poorer quality than we expect in the US. In reality, I'm sure that most of that comes from Canadian Doctors recommending comparatively more conservative treatment methods, which keeps costs down, which ensures that healthcare is affordable enough for the state to provide.
One reason American healthcare is so expensive is because it is possible for providers to pursue extravagant and unnecessary procedures in order to draw profit from insurers, like commuting in an 18 seater SUV when a small compact car will do (Oblig. car analogy). This drives up insurance costs, which makes it harder to afford.
Although, from what I know of US healthcase, I prefer Canada's quite a bit, we do pay for healthcare through our "higher" taxes. Also, you get healthcare even if you don't pay taxes :-)
In Quebec, there's also a medication coverage that is mandatory. You can get one personally or through the government but you need to have one.
About this time last year I was working as the IT manager for a multinational manufacturer. The IT group was targeted for yet another round of cost-cutting; they gave me an hour to decide who would get a buy-out package and a shove out the door. I talked them into letting it be me, put the buy-out money in a rainy day account and started my own software company. I told my wife that if we weren't cash positive within 6 months I would give it up and start looking for a real job. Over the last 12 months we've made more than they were paying me in the "real job" and we've never actually had to fall back on the rainy-day account, in fact we've almost doubled it.
Starting my own company was not easy. I have to sell, communicate well, be easily accessible 7/24 and give my clients plenty of sound business reasons to keep coming back in between turning in top quality work on time. I'd have to work my a** off and most days are 12~16 hours long. I have still managed to take two vacation weeks since I started and we have a third week schedule for May... on vacations I do have to keep one eye on my email and be willing to get up a few hours early to handle anything that can't wait until we get back.
There are no sick days or personal days. Working for yourself means you both have all the time in the world and no time. Before when a stupid boss would make unreasonable demands or mistakes I just had to deal with it. When a client makes unreasonable demands I just charge more. They can be as unreasonable as they want $$$
To start your own company, software or otherwise;
- be prepared for long hours, don't let a client down even if it means pulling all-nighters until your not sure what day it is
- force yourself to learn the new things consistently, figure out where your clients need to be 6 months from now and learn or do whatever it takes to be there waiting for them
- find an accountant you trust to handle the tax laws
- find an attorney you trust to handle the legalese
I've never been happier in my career.
So lets start a union. I am finally ready to join a software union. If you don't want to join, thats ok too.
If you are a union organizer, tell me what to do. gpscruiseNOSPAM@gmail.com
We need to get off our asses gentlemen.
53-year-old Andrew Joseph Stack III, we don't honor you, but we owe you.
Rgds,
jim pruett
Again, I don't see how you would pay more money in Canada than in the USA. Have you looked into the self-employment tax rates here? They're obscenely expensive. There's probably little difference between your IRS taxes in the USA (as a self-employed consultant) and your taxes in Canada. Then, when you throw in just how much health insurance costs for an individual in the USA, and the apparent fact that it's free in Canada, I don't see how you'd do anything but save money by moving to Canada.
I don't have any hard numbers to back up my claim, but if anyone else here who knows more about this would like to chime in, feel free.
FTFY.
The private market insurance companies tend to only pay out 20-30% over what Medicare pays out. Sometimes Medicare does amazing things. Other times, they'll deny things that just don't make any sense whatsoever. A procedure that legitimately costs somewhere around $1500-2000 can expect to get paid out something like $300-500 at best from Medicare in most cases.
Remember my earlier remark? The private insurance companies pay out only about 20-30% more than than on most items.
While I'm all for a public option, I can't envision it being a good thing with the way we're currently running the public option for the elderly and the indigent (Medicaid...).
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
I pointed this out in another post: that's just a claim people pull out of where the sun don't shine. Insurance is just paying a premium for risk transfer, period.
When health insurance covers your routine care, it's not just a "payment plan" for the actual cost of your care. It actually consists of overpaying for your routine care in exchange for protection against the healthcare costs of getting seriously sick. So a simple universal insurance scheme would be to simply charge everybody the average per-capita health care cost, so that healthy people pay the same in health care as the sick ones. It's a perfectly well structured form of insurance.
Are you adequate?
I had my six months as a Ron Paul follower before I came back to the progressive netroots. There are certainly things to like, but there's a hell of a lot that is abhorrent not just to liberal attitudes, but to common humanity. These people are not people you want in leadership positions, and they largely do not want leadership - they can't imagine(or are too stupid to understand the implications of) living in the state they would create, they just want to make a statement. Everyone has that one summer in high school where you read Ayn Rand and It All Makes Sense. Most of the libertarians are either in that phase, are sophist nihilists, are paranoid schizophrenics, or are bigots who resent having to operate under the standards of conduct our society expects. Some are all four. The Reason crowd is the closest to my beliefs, but they maintain a dogmatic stance on economics that isn't tenable with reality - and refuse to give up or explore the full consequences of anarchist ideals.
The most dire thing that will happen is that the industry CEOs will start having to cut their salaries and benefits. We can't have that now, can we? I mean, surely these guys are worth so much more than everyone else, aren't they? They do provide a commensurate degree of value for what they're paid, don't they? So to afford them any less than the lavish, overly-materialistic lifestyle to which they feel they are entitled would be unthinkable!
"and most days are 12~16 hours long"
Do you have kids? Do you plan to? You work 12-16 hour days constantly and they will end up pregnant addicts. NOTHING screws up your kids faster than parents who don't have time for them.
on vacations I do have to keep one eye on my email and be willing to get up a few hours early to handle anything
That's not a vacation.
There are no sick days.
You are one car accident away from bankruptcy.
When a client makes unreasonable demands I just charge more.
No, no you really don't. Been there, done that. Over time, clients expect you to constantly get cheaper. In time, you'll find yourself competing against third-world labor.
don't let a client down even if it means pulling all-nighters until your not sure what day it is
I see you have your cardiac arrest penciled in for next year. What does your doctor think about this plan?
I've never been happier in my career.
Been there. Done that. Talk to me about how you feel after three years of this.
He put his boots up on the table and made a face. "The sig," he smirked. "You can waste your life in search of the sig."