Am I being ripped off

I work for a painting company and im an hourly employee who's on a 1099. My boss claims he cant afford to have me and others as w2 employees saying he cant afford it yet hes buys a new house and drives some luxury vehicle. We get no overtime, no paid time off (this is Washington state) or any of those perks. Its really frustrating that I choose to work here he traps guys in by paying us a fair wage and gives the illusion that we're our own boss when thats far from the case. Its also frustrating every single coworker is bottom of the barrel when it comes to quality and service then if I bring up a complaint about a coworker say leaving garbage at the job sight or painting over grease and hair my boss says absolutely nothing to them. A good friend told me im being ripped off majorly and that my boss has to see me as the bottom barrel guys. I do good quality work and all our customers love me for the most part. I am calling up some people to find a new job which I have 9 years house painting. My boss is a good guy who's helped me out 100 times or more so I wont turn him in for fraud on those grounds but I am wanting to tell him hes ripping us all off basically be honest because 1 ticked off coworker can call L&I or the IRS. We have one coworker who's paid under the table and rubs it in everyone's face id love to turn him in but I dont want my boss in trouble. Figured id take to reddit to hear everyone's honest opinion. Also for me to stay working here its my choice I ain't blaming my boss but im just frustrated ive been ripped off ALL these years.