A 1099 means you are an independent contractor and will pay your own taxes, generally through quarterly estimated payments. You are also then required to pay a self-employment tax, and make double the contributions to SS and Medicare. W2s means you are an employee, taxes are withheld, and the employer makes half of the SS and Medicare contributions. I believe you are also better covered in terms of workers comp insurance and so forth.
So I think the answer is that it is more complex from a tax perspective than what just a 20% upcharge would cover. Your risk as an independent contractor is also higher too, as your employer is less invested in keeping you on, if that is your longer term goal.