Equal Pay

New Tax Law Will Turn More Jobs into ‘Gigs’

Thanks to a provision in the new tax law, employers around the country will be making their employees an offer they’ll hope they won’t refuse: “Let’s reclassify you from an employee to an independent contractor. You’ll save on your taxes – big time.”
That’s because the new law seemingly rewards workers who become contractors. Here’s how it works: “Sole proprietors” – in other words, business owners – will be able to deduct 20 percent of their “pass-through income.” This business income is immediately “passed through” to the owners’ personal tax return.
Before you stand up and cheer – or sign up as a contractor – remember this helps the rich and hurts the rest of us.
The biggest winners will be the wealthiest 1 percent who rake in more than half of all “pass-through income.” For instance, Donald Trump owns more than 500 “yuge” “pass-through” real-estate companies.
Your boss also stands to gain because it costs less to hire contractors “as needed” than regular employees, with wages and benefits all year ‘round.
But, if you switch from worker to contractor, you will lose your healthcare, pension benefits and paid vacation days, as well as protection under federal minimum wage, unemployment insurance, workers compensation and anti-discrimination laws, as well as your right to organize and join a union.
These reasons explain why corporate interests are pushing the “gig economy” into over-drive, with contractors, part-time and temporary workers increasing by 9 million from 2005 to 2015, while workers in regular jobs declined by 400,000.
Far from creating new fulltime jobs with benefits, the new tax law will speed up “the temping of America.”

Categories: Equal Pay, Jobs, Taxes