A Tax Reform Tweak With Big-Time Benefits
A generational opportunity to reform taxes should update the tax code for the next generation economy. Well-meaning legislators should tweak their bill by adding the New Gig Act, which would aid millions of Americans. The bill would bring the tax code up-to-date for those who work in the “sharing” or “gig” economy — people who drive for Uber or Lyft, work for Grubhub, Postmates and other millennial enterprises.
This would be true tax reform at no cost to American taxpayers. It would simplify taxes for these workers — who currently have to do multiple filings and often just don’t bother. It would also help the companies who have to file.
Tax Reform for the “On Demand Economy”
This amendment would classify these “on demand economy” workers as independent contractors — which is what they are. They’re not simply employees of any one company.
According to the Aspen Institute, 45 million Americans say they’ve worked in this growing new economy. What’s more, 85 million Americans say they’ve been customers of these companies and contractors. According to J.P. Morgan Chase, 2.5 million Americans work for on-demand economy entities in any given month, representing between 20 and 30 percent of their income. And this group of contractors is only going to grow.
This is just plain common sense. This amendment reflects where our country’s economy is going, and gives workers more incentives and choices to find jobs and earn a living. It also gives more flexibility and more opportunities to find out what career path they want to pursue — especially for young people just starting out.
This addition to the tax reform bill is sponsored in the House by Congressman Tom Rice, R-S.C., who himself is a Certified Public Accountant and tax attorney. This is how Congress is supposed to work: citizen legislators crafting bills that benefit the public based on their personal experiences in private life. A companion bill in the Senate is sponsored by Senator John Thune, R-S.D., who has an MBA.
Simple is Good
So many Americans have become disillusioned with their government. This would be one effective way to show them that someone is listening.
One of the goals of tax reform — as outlined right from the beginning by the White House, House Ways and Means Committee Chairman Kevin Brady and other congressional leaders — was to simplify the process by which Americans pay their taxes. If it’s a noble goal to get the filing procedure for most Americans down to a single page of paper, then let’s simplify things for this growing number of American workers as well. The New Gig Act would allow these workers to:
- File less forms.
- Have the requisite amount of their income and payroll taxes withheld instead of their having to make quarterly payments. And,
- Ensure they comply instead of risking legal exposure and penalties because the process is too complex and time consuming.
More compliance means more money coming in without raising taxes on anyone. This likely means the New Gig Act might actually get bipartisan buy-in.
So many Americans, especially young people, have become disillusioned with their government. This would be one effective way to show them that someone is listening. That someone is working to make their lives better — giving them more opportunities to succeed and prosper.
Mr. Blackwell, the former State Treasurer of Ohio and mayor of Cincinnati, was a senior domestic policy adviser to the Trump/Pence Transition Team.