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This is not a bullshit argument. It is similar to labor laws in some states. You can claim someone as a indy contractor but if they are working with your tools or at your job site or under your instruction ... guess what? some states don't care what you call them ... they will be processed as employees not contractors.

Not bullshit.

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If there were a special tax on heart rate monitors that _are_ medical devices, and FitBit was calling theirs not a medical devices to avoid paying that tax, then the analogy would be reasonable.

The whole employee/contractor thing is all about payroll taxes. You have to pay them yourself if you get a 1099, but your employer pays them if you're on a W-2. Employers have a much better track record of paying that, so the government wants to avoid too many 1099s.

I've been a contractor before. I got a W-2, but no benefits. Now everyone is happy.

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