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
>>>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
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 it worked like that it would be awesome. But it doesn't.
Say you are an independent programmer with EIN in hand. You walk up to Acme Industrials and present your resume and EIN. They contract you because, dammit, you're really good. A few months go by. You're very good, and love the independence of contracting. So good, in fact, that Acme renews your contract. Life is good.
Tax season rolls around. The government says, "Hey Acme, your awesome programmer contractor is really an employee. You owe us 30% of his salary in withholding tax. You owe use unemployment taxes. You owe us social security taxes. You owe use these other fees. And you're late on paying for the past three years also. Pay or lube up."
Acme gets rid of the awesome contract programmer who is so damn good that he doesn't need an agency to find him work. Well, at least he didn't before.
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.