A note to the reader; those who own the assets still pay little in taxes. That’s why the wealthiest typically support the Democratic party.
Glenn H. Reynolds
A recent tweet says it all. “Sam Bankman Fried: I don’t know where $10 billion went. The Pentagon: We don’t know where $2.2 trillion went. The IRS: You just sent $601.37 don’t forget to report it.”
The Biden administration is recruiting 87,000 IRS agents, allegedly to keep an eye on billionaires. But all appearances are that it’s aiming at the little fish of the gig economy instead.
Taking payments for a side hustle via PayPal or Venmo? Not only is the IRS reminding you those payments are taxable income, it’s deputizing those payment companies to snitch on you.
The federal government can lose trillions, as a recent Pentagon audit noted, and nobody goes to jail. Sam Bankman-Fried can lose billions and (so far at least) be treated as a darling by members of Congress to whom he donated. But you’re expected to keep perfect records, and the corporate/government machine that characterizes early-21st-century American governance will be sure to keep close tabs on you.
As Leona Helmsley once allegedly said, taxes are for the little people. And you, hipsters of the gig economy who probably voted for President Joe Biden, you’re the little people.
But wait — it gets worse. People get payments through these companies for all sorts of things, like gifts from family members, expense reimbursements from employers, even money from friends for medical expenses, etc. Venmo and PayPal may — and sometimes undoubtedly will — mischaracterize these tax-free gifts as something taxable.
Well, no problem, you can just tell the IRS that Venmo is wrong, right?
Oh, no. That would be too easy. According to the IRS: “Those who receive a 1099-K reflecting income they didn’t earn should call the issuer. The IRS cannot correct it.”
So if Venmo or PayPal mischaracterizes your nontaxable gifts as taxable income, you have to try to get Venmo or PayPal to change things. Good luck with that. You may wind up having to pay an accountant hundreds or thousands of dollars to straighten out the mess or face an IRS audit.
The threshold used to be $20,000 but was lowered to $600 as part of the Democrats’ American Rescue Plan Act. (No Republicans voted for this monstrosity.) The legislation tightened the screws on the little guy, and that was no accident.
As The Post editorialized in June, “Think about this the next time Elizabeth Warren and AOC whine about the wealthy not paying their share. Yet the legislation they passed goes after hobbyists and little folks trying to earn a few bucks in various side hustles. It’s only going to punish the US economy a bit more: Some will have to charge more to make the work worthwhile; others will quit now that it means more paperwork and taxes.”
Why would Democrats do this? It almost seems as if they’re hostile to self-employment and small business.
Well, it seems that way because in fact they’re hostile to self-employment and small business.
You may have noticed that in this era of social-media mobbing, people get fired from their jobs when spineless employers are threatened by angry online mobs.
But you can’t get people fired from jobs when they work for themselves. Self-employed people — and even people with a second income from a side hustle — are more independent than people who depend on an employer’s paycheck. (Historically, this is why minority groups, subject to bigotry and prejudice in the workplace, have started their own businesses. You can’t be fired for your race or religion — or, nowadays, your politics — if you don’t work for anyone to begin with.)
That kind of independence is anathema to today’s Democrats, who have made pretty clear they want everyone under their thumb. Since the pandemic, in which lockdowns gave preferential treatment to big-box stores while brutally punishing small businesses, it’s been a steady grinding down of small businesses and entrepreneurs. (Well, except for the Bankman-Fried sort of “entrepreneurs” who make six-figure donations to favored politicians.)
This new rule is just another tightening of the screws. If everyone works for the government or a big corporation that’s in cahoots with the government, everyone is controllable. And for Democrats, that’s not a bug but a feature.
Glenn Harlan Reynolds is a professor of law at the University of Tennessee and founder of the InstaPundit.com blog.
Read the original article on NY Post’s website here: