Tax Law Offers a Carrot to Gig Workers. But It May Have Costs.

Tax Law Offers a Carrot to Gig Workers. But It May Have Costs.
The tax law will accelerate the shift, he said, because employers who are already keen to reorganize in this way will recognize
that even fewer workers are likely to object as a result of the tax benefits.
The tax benefit could also be offset in some cases by the need for contractors
to pay both the employer and employee portion of the federal payroll tax.
The new tax law is likely to accelerate a hotly disputed trend in the American economy by rewarding
workers who sever formal relationships with their employers and become contractors.
“If you’re above the median but not at the very, very top, one would think you’d be thinking
it through,” said David Kamin, a professor of tax law at New York University.
On the other hand, many individuals fail to avail themselves of existing tax deductions, like the one
that freelancers can take for their expenses, said Jamil Poonja of Stride Health, which helps self-employed workers buy health insurance.
Workers hired as contractors, who tend to be cheaper, may be less likely to complain about their status under the new tax law.
And many labor advocates say the new tax deduction will encourage more employers to go
that route by giving them an additional carrot to dangle in front of workers.