They called it the “American Rescue Plan.” Makes sense.
It would’ve been a smidge wordy to call it the “Gig Worker Smackdown to Net the IRS $8.4 Billion by Making Lots of People Pay Taxes on Income over $600 Plan.” Plus the latter option might have tipped off the gecko-eyed among us as to the law’s side effects.
If you happened to spot this sunny piece at freightwaves.com, you know of the act (the song and dance, to be more precise) toward which I direct my digital bile.
Tucked snugly into the “Avatar 2”-length COVID-19 relief law enacted in 2021 (MSRP $1.9 trillion) was a revision to Section 6050W of the federal tax code. If you’re hungry for a time-consuming chore that will give you an excuse to turn off “Real House Cats of Orange County,” download the whole tax code to hunt for said section. You might need “Ctrl F” a lot, though; the blasted thing is 3,995,585 words long.
Anyhow, here’s the rub-a-dub-dub.
Section 6050W — the “W” is short for What-in-tarnation-were-they-thinking? — sets income thresholds that Gig Workers and online sellers have to meet before their digital payment apps report the earnings to the IRS. Through the end of 2021, that figure was $20,000 annually for workers completing over 200 transactions, effectively exempting scads of gig workers and online sellers and making their side jobs worthwhile.
But we mustn’t have productive economic activity going on without Washington taking a cut, so the revised 6050W ever so slightly tweaks the threshold — by 97%. Yes, gentle reader, the anemic new limit, above which workers will be ratted out and saddled with a scorching tax bill for taking some initiative, is $600, regardless of the number of transactions.
Translation: Gig workers are well and truly gigged. They’ll be greeted in 2023 not with gladsome New Year’s traditions of tender black-eyed peas, ham hock-seasoned turnip greens, sizzling pones of crispy cornbread and deafening party favors but with 1099-K’s — cheery reminders to cough up the sweet moolah because Big Brother knows exactly what they’ve been up to. It’s not hard to imagine quite a few of them throwing up their side hustles in exasperation and taking up foosball, putting a damper on an economy that’s too damp as it is.
No matter. The IRS says that over the course of a decade it’ll pull down an extra $8.4 billion from the new rule. And in the end, isn’t sending truckloads of tribute everyone’s fair share to Washington what really counts?
There are belated efforts in Congress to revert to the $20,000 threshold or at least hold off on enforcing the $600 edict. They’re likely doomed. So, says I, give Washington credit for consistency if absolutely positively nothing else ever: It’s going to get its 30 pounds of flesh, but at least it’ll do it while “rescuing” us.
Phoning it in
The headline on my colleague Kim Link-Wills’ follow-up on a March incident in Chesapeake Bay: “Cellphone use blamed for Ever Forward grounding.”
Well, it’s responsible for everything else wrong in the world. Why should piloting a three-football-fields-long ship be special?
The Light Load is an occasional look at the world of transportation and logistics through the eyes of an industry greenhorn.
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The post The Light Load: ‘If it gigs, tax it,’ Washington decrees appeared first on FreightWaves.
