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Opinion

Op-Ed: Paying taxes in the hustle economy

Tax Preparers Work To Meet Tomorrow’s Deadline
A man holds a sign advertising a tax preparation office in Miami, Fla. on April 14, 2010.
(Joe Raedle / Getty Images)

I went to file my taxes recently through a certified accountant. As he clicked my information into his computer, scattered across his desk were my many 1099-MISC forms — the tax document needed to report “miscellaneous” income from gigs, contract work, freelance jobs and the like.

My tax guy looked me dead in the eye. “I see your previous filings.” He paused. The small wrinkle overtaking his nose betrayed something between pity and disgust. “I’m just noticing that today you’re registering business losses for the third year in a row.”

I shrugged. “OK,” he continued. “For my purposes, I just need to make sure you’ve got an actual business, not a hobby.”

I laughed. Sometimes a technical person makes a point of clarification that is so innocent in its cruelty you can only laugh.

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Many dread filing our taxes not just because it’s a byzantine chore; it feels like an indictment during shifting, ill-defined times.

I wanted to explain to the accountant how not long ago, for two years straight, I made well into the six figures. I wanted to deliver an erudite lecture on the boom-bust timbre of the hustle economy. But I kept my mouth shut. Even though my tax preparer is experienced in the bureaucratic minutiae of reporting 1099s, he has no real grasp of the greater hustle economy.

And how could he? There’s no hard data of the sort that moves people like him. How people like me earn income and file taxes slips through the cracks in the government’s information-gathering — even though it would benefit us all better to understand it.

My circumstances yoke me to others who don’t fit traditional job or tax categories, including the growing ranks who secure work on mobile apps. When I plant my seat in a Lyft, I wonder about the driver as a human being and as an economic phenomenon. Who is this man looking at me in his rearview mirror — and what are his prospects in the billion-dollar ride-hailing market relative to other side jobs he could take on?

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The Bureau of Labor Statistics is the government’s paramount fact-finding agency on work. It claims that “contingent workers” comprise about 10% of the workforce as of 2018. But consultants and labor groups — from McKinsey & Co. to the Freelancers Union to Upwork — say contingent workers make up 30% to 40% of the workforce. Even those who actively study this work phenomenon can’t agree on its character or scope.

Come April, I think hard about the data that the bureau collects and circulates to assist job-seekers, guide public policy and inform private industry and financial markets. Just last year the bureau released its first Contingent Worker Survey in 13 years. It’s also trying to incorporate better tax and Social Security data to bring into focus a more accurate picture of how this country works.

What the Bureau of Labor Statistics can tell me right now is that the occupations with the highest concentration of unincorporated, self-employed workers are sales, agriculture or “creativity.” The “creativity” job fields are dated nearly to the point of meaninglessness. Its Occupational Outlook Handbook, once considered a bible to economic research and decision-making, groups creative jobs into categories such as “Media and Communication” and “Arts and Design.” Carefully poring over the manual, one wonders how the bureau would assess the tattoo artist who is also a coder, the podcaster who is also a festival planner, and the DJ who is also a community organizer.

It’s alarming what crucial information about hustle industries is lacking: worker characteristics, contract standards, overall compensation trends, compensation trends by geography and substrata, earnings by race and gender, benefits data, job openings and turnover, and multi-factor productivity, which is a rough measure for innovation in any given industry.

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Tens of millions are busting a hump juggling hustles. Today’s hustle economy means interminable shifts working “on call” while leveraging a viral Instagram campaign. Though the cobbled-together adventure of my gig life is thrilling — giving speeches, running private seminars, writing — it demands a shrewder entrepreneurialism and a stiffer work ethic than any office job ever did.

An increasing number of us are surviving this careful alchemy of short-term jobs, freelance assignments and ubiquitous self-branding. But there is still so much in the ether of the market that we can’t put our finger on, let alone rely. The emerging taxonomies of work and value fall short. Because the official hustle-economy data are so arbitrary, badly gathered, and incomplete, they leave rookies ripe for exploitation. Those strivers have little accurate information to help them negotiate their wage, and almost no framework to assert their rights, organize or even strategize self-advancement.

As I left my tax preparer’s office, I finally recognized the extent to which the hustle economy has outpaced the key institutions that are supposed to measure and explain it — not just my accountant, but also the Labor Department, the Fed, the Internal Revenue Service, industry heads, labor organizers and the legislators set with making our tax rules and minding workers’ rights.

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When economic data hit Americans in the face, those government statistics often don’t jibe with our lived reality. And to survive this economy you gotta represent. Many dread filing our taxes not just because it’s a byzantine chore; it feels like an indictment during shifting, ill-defined times. There’s all the smoke and mirrors, and then there is the concrete moral and financial reckoning that is deadlined each April 15.

Rich Benjamin is author of “Searching for Whitopia: An Improbable Journey to the Heart of White America.” He is at work on a new book. Twitter: @IamRichBenjamin

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