[Why is this here? Because musicians are considered “gig workers”. Please pay attention!] By Brian Faler, Politico | Airbnb, Etsy and other pillars of the gig economy are shaping up to be rare losers in Democrats’ coronavirus relief package.
Buried in the legislation are provisions that will require them to provide a lot more information to the IRS about the money millions of people earn through their platforms, which is likely to bring in billions of dollars more in federal taxes.
That will generate cash Democrats can use to reduce the total cost of their stimulus plan.
But the industry says it’s getting ambushed, complaining it didn’t even know lawmakers were planning the tax crackdown until shortly before it was approved last week by the House. Company officials worry that asking people for their Social Security numbers — which the companies will need to produce the tax documents — and raising the specter of the IRS will scare many away from their platforms.
“We’re concerned that the proposal could unintentionally dissuade many casual and one-time sellers, who could be forced to share their Social Security number with online platforms before listing anything for sale,” said a spokesperson for Etsy. That could “turn away would-be entrepreneurs at a time when many desperately need the extra income.”
It’s not entirely clear who pushed for the provisions, though efforts to require more reporting by the industry aren’t new. A spokesperson for the tax-writing House Ways and Means Committee did not respond to a request for comment.
The wrinkle comes as Senate Democrats debate the stimulus plan, which lawmakers aimed to get to President Joe Biden’s desk by March 14, when expanded jobless benefits expire. Much of the focus on the stimulus has been on its winners, though there would be a few losers as well.
For those in the sharing economy, the issue is provisions that would dramatically reduce the threshold at which companies like eBay, GrubHub, Doordash and others would have to report to the IRS the earnings of people who use their platforms to make money. The users would also have to be given the information.
Currently, that’s only necessary when someone earns more than $20,000 through at least 200 transactions. Democrats would drop that to anyone earning more than $600, regardless of the number of transactions.
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That isn’t necessarily what they’d have to pay tax on, though. The tax would only apply to their profits, after their own costs or expenses are deducted.
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Read the rest of the story here:
https://www.politico.com/news/2021/03/05/gig-workers-coronavirus-relief-bill-losers-473902