A tax expert warned that IRS penalties ‘can destroy a person’s life’ and said many gig economy workers won’t be able to afford this sudden tax hike.
When the economy is struggling to recover from a pandemic and crushing government lockdowns, that’s probably the worst time to impose $1 billion in new annual taxes on the working class. But that’s exactly what a new provision quietly slipped into the Democrats’ sweeping $1.9 trillion COVID legislation would do.
“A last-minute insert by Democrats looking to offset the cost of their coronavirus aid package would send tax collectors into the gig economy, eventually costing Uber and DoorDash drivers, Airbnb hosts and others about $1 billion annually,” Roll Call reports.
Under current tax law, earnings data for gig economy workers only needs to be reported to the IRS once it reaches $20,000. This means that small earners pursuing gig work to supplement their income aren’t hit by crushing federal taxes. However, the Democrats’ provision would nearly eliminate this benchmark, and instead require all income above $600 to be reported to the IRS.
“The stiffer tax burden would be imposed while 10 million Americans are unemployed and more and more have turned to freelance and gig economy work to make ends meet,” Roll Call notes.
Indeed it would, and this would be disastrous for both workers and the economy. read more