That's why contractors get paid four times as much hourly as employees. Twice would only just cover what contractee isn't paying for taxes and accounting/legal overhead.

Contractors _don't_ get paid four times as much as hourly employees. Oh sure, companies might get billed four times as much (though in my experience it has 1.5 to 2.5 times as much: I've seen invoices sitting on my boss's desk, and once even the consulting company mistakenly sent the invoice to _my_ address). Contractors probably get paid 1.25 times as much on average: the rest goes into some suit's undeserving pocket.

The contractor company employees don't get paid four times as much, but none of those factors apply to them: they have full time jobs, rather than billing their employer (the contractor company) for only hours worked, and the contracting company still has to pay for accounting overhead and taxes.

If you become an independent contractor, doing all your own taxes and client interface, you'll quickly realize that those "undeserving" suits are saving your sanity by doing all the people-handling and drudge work that you, as a hacker, would hate.

Also, in that situation, those suits pay their employees full time even when the contracted hours this week only add up to 18 hours. They bear the risk of having that happen, and in return, they soak up the profits when they get to charge the contractee for 60 hours worked in a week and still pay only salary to their own employees.

In the case with which I'm most familiar, the contract is for two days a week at $50/hr, and the employee of the contractor company gets ~$12/hr (here in the deep south, that's livable; he owns his own home). That may sound terrible to you, but on days they don't have anything for him to do, he still gets paid. It's a tradeoff.