If you file a W-2 you are screwed, period. The government will rob you blind
Accountant I knew always said, it isn’t about how much you make, it is about how much you keep. He always said a guy making 80K a year with 1099/self employed income keeps more money then the guy making 120K a year with w-2s because the self employed 1099 guy gets to write just about everything off.
And if the W2 guy rents, he might as well just sign his paycheck over to the IRS at that point.
You say that like it’s a conscious decision to have a W-2 filed. The vast majority of employees in the US have a W-2 filed by their employer. They don’t get a choice in the matter.
As for renting versus buying, that again is often not a choice. People working minimum wage jobs cannot purchase a house in most markets. You can’t flip burgers or clean toilets and afford a $300,000+ house in any of the higher cost of living areas. Those people need to rent. Trying to get them all buying a house is how we got 2007/2008.