According to Forbes, the 1099 economy is booming.
One of the biggest obstacles facing government is its ability to collect taxes. So long as folks are employed as employees, the government easily got its share of plunder right off the top via the federal withholding tax and the Social Security tax, along with other taxes including state taxes. Enforcement of tax collections was never really much a problem for government so long as most folks were employees. The government didn't need an army of tax collectors; employers functioned as the primary tax collectors for the government.
But with the economy tanking and necessity being the mother of invention, folks are now forced to discover new paradigms of survival. Many companies are resorting to contract labor to avoid the legacy costs of health insurance and retirement plans. They hire independent contractors and issue a 1099 instead of a W-2. Folks who earn 1099 income are required to file tax returns, they are required to pay quarterly taxes and they are considered self-employed. They are effectively small business owners who also avail themselves of legal tax deductions.
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