[puszczyk]

Well, they likely need to pay income tax and social insurance in their own country. The burden has just been shifted to them.

To be fair, I’m not 100% sure how this works in the US, in PL where I’m from and probably in all of the EU countries if you are on a job contract then the employer pays the taxes and social insurance for you. If you are self-employed / freelance you have a business registered in your name and it’s your responsibility.

Either way, I don’t see how the taxman’s cut disappears. Also lot of countries have higher taxes + social insurance than the US.

If you really want to make a case, you can say that the contractors from a low-cost-of-living countries may undercut American workers (but then, if they work remotely I think they mostly undercut the office jobs, not “workers”) because they ask less money for the same.

[adanto6840]

Works pretty much the same in the US, too.

When we pay US contract labor, we generally send the "gross cash amount". The US contractor actually has to fill out a form upon commencement that says how their taxes & social insurance will be paid; at the end of the year they get a form from the businesses they did work for which shows total paid, and they use that to do their taxes.

Same thing for international contractors -- they just have to deal with their local jurisdiction's taxes, instead of the US IRS.

[novok]

He is talking about avoiding paperwork & payroll management stress, not avoiding taxes per say.