tv Key Capitol Hill Hearings CSPAN May 25, 2016 7:15am-9:01am EDT
online platforms. the even heard it called economy. it is changing the face of america. the dizzying pace of this change has presented opportunities and challenges. these new platforms and dramatically change the way we could work. this new generation of workers want to set their own hours. on one on-demand platform on multiple platforms. this is the essence of economic liberty. the power of the free market. these entrepreneurs are running your bureaucratic
resistance. they've gone largely unacknowledged. we hearing from a growing chorus there arens saying new and unnecessary obstacles to success in this field. people often pay too much in taxes. not having the records to back up their deductions. the irs has not been part of the solution for entrepreneurs. a current tax system is not working for most americans. we will discuss some of these problems and discuss potential solutions as well.
i'm looking forward to hearing from the panel. now we will hear from the ranking member ms. velazquez of new york. velazquez: development of has been a economy way to sell goods and services. it allows the selling renting trading of everything. the numbers strongly suggest that the sharing economy is here to stay. interest as of september 2015,
it was available in 60 countries. it is estimated to fulfill one million rides daily. it may be rooted in existing economic struggles. dislocated workers are seeking new ways to reenter the economy. it all becomes ways for ordinary americans to dissipate in entrepreneurship. rise of these networks has created new opportunities for americans. while many of the workers in the are doing well they must be protected from unscrupulous individuals.
atypically employee -- define them as independent contractors nonemployees. no tax withholdings. trying to determine whether certain workers qualifies employees rather than independent contractors. lawsuits over whether companies have been. the challenge is to ensure employees are protected without stifling promising innovations. if the employer controls the say he ise you independent? workers are connected to
consumers through online methods. it seems to be trading at the expense of hard-working americans. $15 billion in underpaid unemployment taxes. as these technological revolutions advance, it is also important for this committee to monitor what is happening in the new sharing economy. risks onn minimize activity for small businesses. i would like to thank all of our witnesses for being here today. you add significant value to the
committee's discussion of this issue. sharon: i will take a moment to explain our timing. there's a lighting system on your table to assist you. deal a light will sell you have been amended to read about. our first witnesses caroline bruckner. taxation and managing director at the center. she directs the team is small business experts and researchers.
she served as chief counsel for the u.s. senate committee on small business. our second witnesses rob willie. he is vice president of test rabbit in san francisco. users who want to outsource errands for a fee. the company started in 2008. he is created marketing campaigns for several businesses. nike cadillac and. nuclear. he specializes in application development issues. the subcommittee on health technology. he is also testified before the u.s. senate.
he also serves on the advisory council of the mobile health care organization. i introduce mr. joe kennedy senior fellow. advice tovided legal individuals in the public and private sector on these issues. he previously served as the u.s. department of commerce. he has a masters degree in agriculture and applied economics.
ms. bruckner: thank you for the interpretation to join you today. when it was caroline bruckner. i am the managing director of the co-god tax policy center. we're currently focused on the tax compliance issue. small business owners are renting rooms in providing rides and serving consumers in various business transactions. companies such as airbnb uber lift and many others. a report entitled shortchanged. what is driving the online platform economy? having spent more than a year investigating these issues, for
tax purposes service providers in theirrs are in fact millions of them. working and earning income in ways that are not readily identifiable in the government's existing categories. these issues should be considered by congress. not only because millions of american taxpayers have to comply with these antiquated tax rules. they have a very real implication on treasury policy. more than 2.5 million americans are employed in the on-demand platform economy. this represents explosive growth on this market segment. a 56.5% increase in alternative
work arrangement. people do cycling out of the land that form economy. ranges monthly income from $550 to $3000. by and large the majority of individuals in this economy work less than 50 hours a week. dozens of individuals currently participate in that economy. our objective was to assess whether these platforms exist. they are experienced self-employed small business owners. survey revealed that among those who turned income in the online platform economy 22% of all
not know whether they were required to file certain tax documents. 43% growth aware as to how much they would on taxes. half didn't know that any tax deductions expenses or credits related to the online platform economy. they could face potential audit and penalty phases. now they have relatively low amounts of earned income. which of time preparing returns and taking down questions. againrd time and time that the small businesses operating in this segment generally want to be honest and payment they owed. those options don't exist.
one of our survey respondents they did not receive a 1099 from their online platform. this is not surprising. the statutory requirements for filing them are very complicated. current tax system is not working for a significant percentage of new companies. the problem is a lack of information and understanding. these tax challenges are only going to continue to grow. with the increase in the number of small business owners. comes to filing taxes on the income earned from the online platform work.
everyone is losing under the current rules. economy players and the irs deserve greater efficiency and thank you for the work you do on behalf of america's small businesses. and rob willie: thank you for the invitation to testify today. there are legal regulatory and public policy challenges. platforms like ours can improve their daily lives. we set out to revolutionize everyday work. we decided that we needed a one that people stay
in the house paint a room or possibly mold along. new york is our largest market. san francisco is our fastest growing market. 5000 active at any given time. they company these everyday tasks. to change the face of these industries by representing their everyday needs. we consistently support the effort toward flexible hours. on an average of $35 per hour. we caught everyday work for everyday people. 10% of our testers work full-time. many of them have tripled year-over-year. it consistent with the larger platform economy.
support to better support themselves and their families. the on-demand platform economy has become an important platform when volatility changes individuals and family. platforms like ours provide a new earning option that is accessible to millions of americans. platform, the emerging economy has sparked intense debate on the classification of workers versus independent contractors. the current classification system was defined around a much different era, and has been shaped by decades of regulations and court cases. as a result, while we cannot support our pastor's while preserving -- taskers, as professor caroline bruckner
noted, many participants who do not know or are not fully aware of both the tax obligations and the benefits, as a result of earning income. that taskrabbit know others are facing these challenges. they sign up to join our platform, making their first foray into the world of self-employment. some of them do not understand the economic triggers that require the filing, but many do not. it is our interest to see our taskers see a better understanding of compliance and planning, greater stability and transparency would help maximize return on participation in our network. it is their freedom as entrepreneurs. today's topic is just one of many where taskers could benefit from better training. they're looking to better market themselves and services, access health care, and plan for retirement. we would like to be a resource,
a partner, and collaborator for them. we urge congress and relevant government agencies to look at participating in this emerging platform market place. as a pioneer of this emerging market, we welcome the opportunity to work with policymakers as our company grows and matures. we consider this engagement ruling on many levels. just last month for example, we begin the first technology company to announce that we would follow the diversity principles outlined in the congressional black caucus and the tech 2020 initiative. mr. chairman and ranking member velasquez, we thank you for your interest and taking the time to understand our business, and how it is changing what we call the future of work. we appreciate the bipartisan interest in the platform economy, most noticeably by the committee cochaired by congressman isaacson. we hope we can find solutions
that will further enable task rabbit and the economy to grow. and to empower all business owners across the country. thank you. >> mr. reid, you are recognized for five minutes. >> ranking member velasquez and distinguished members, my name is morgan reid. thank you for holding this important hearing. association represents 5000 staff makers and connected device companies across the united states. our members have enabled the rise of the sharing economy leveraging the connectivity of smart devices. sharing economy companies have grown rapidly over the past decade because they allow instantaneous communication secure transactions, and personalize relevance to consumers. moreover, these same factors allow small businesses and tens of millions of americans to earn more for their families with a disability and autonomy that
flexibility and autonomy. these opportunities will cease to exist if that federal regulations continue to hinder growth. i want to highlight free actions that affect our members. first, congress and the internal revenue service should take great care to ensure that the federal tax code enables, rather than stifles the sharing economy. specifically, treating them as employees are the federal tax es would be detrimental. we need transparency in the resolution process, including the ability to settle disputes with the irs in an effective and efficient method. legislation like that imposed by senator rob portman can ensure that. congress should ensure fairness that internet sales tax are based on the location, calling congress to reject proposals that would force businesses to become --
policyond the specific request and legislative language, i would like to take a moment to illustrate how the sharing economy is far more than existing packages. the popular media tends to describe the sharing economy as a disruptor of existing business models, ebay replacing the yard sale, uber replacing the taxi. but this is a false or at least limited dichotomy. the sharing economy not only replaces also creates new concepts in people engage and interact. or example, a business in chicago utilizes a sharing platform to connect nutrition coaches from across the country to consumers seeking a healthier lifestyle. using the service, dedicated services help consumers meet the goal. but they do not merely connect expert. nutrition a
if ultimately switches the paradigm by getting users to change bad habits, not just the once a month meeting you would receive with traditional care. users can take pictures of food they are eating, share it with their coach, and get real-time feedback and enforcement. coaches get inside about their existing habits of the user, so they can step in before that decision is made. actively working to prevent diabetes and other health problems. in short, creating healthy habits is relationship-dependent. it does not exist without the tools that create our modern sharing economy. would merely have individual coaches trying to change bad habits given an isolated 60 minute session. there is no possible way that every coach and registered dietitian would provide their own tools. nor could a company writing the software afford to hire an army of nutrition coaches, and and hope to create a user base. the only way it works is through
the sharing platform, one that allows users to find health they need, and for the coaches to build a take as many or as few clients as they want. everyplace is no existing industry. and there is a story like this in every single district in america. each one of you received a packet of baseball cards with companies from your district. not all of the businesses are all part of the revolution taking place. one that is moving high, beyond just big companies, in fact, our most recent study showed that 82% of the top app companies are small businesses. most which hail from other than silicon valley. the company that you have in hand are looking to grow and succeed, each with their own vision of what success looks like. but the success of the sharing economy is predicated on the success of a power tred universe, opening up a bricks and mortar location and providing services online, and
four platforms to track users through better training, tools, and clients, without tggering a change in tax status. we urge congress to ensure the rules we follow make sense in an age where the neighborhood yard sale is now nationwide, and the daily client may not live in the same country. the system empowers the sharing economy, and offers incredible and benefits to each and every american. and i look forward to working with you to advance measures that empower innovation. >> thank you very much. >> mr. kennedy? mr. kennedy: thank you for the opportunity to discuss this with you. the approach to this topic is driven by three considerations. the first is that, while the sharing economy is growing rapidly, it is still representing only a small fraction of an increasingly diverse labor market. forums areernet delivering tremendous value to both consumers and workers.
workersvey of over 4600 from 11 platform companies, only 7% said they were dissatisfied with the experience. workers earned an average of $7,900 over the previous 12 months, which accounted for 22% of the total household income. the average hourly earnings was $28. the third consideration is that the traditional employee and independent contractor distinction no longer serves much purpose for a growing share of today's labor market. theally by default, common-law test has become the basis for determining whether all of the major federal and state labor laws apply. the results is a large amount of uncertainty and litigation that discourages companies from supporting gig economy workers and consumers in a variety of ways. some of the ways that companies have said they would like to support the independent
andractors include training access to business and financial advice. such efforts can be enormously valuable to workers, who are, after all, for all intents and purposes, running their own businesses. within the tax field, help with tax advice, record-keeping, and withholding would be especially important. the tax laws are enormously complex. workers need to make a number of important decisions, including what form of the business to create, whether to set up a new savings plan, and what salaries to pay themselves. they need to determine what expenses are deductible and begin keeping the necessary records. and they need to complete the tax filings in a timely manner. in a survey, 20% of online workers listed understanding tax and legal obligations as one of their top challenges. in addition, these platform
companies could add value to both workers and consumers by setting prices, handling transactions, letting parties rate each other, and conducting background checks. such activity is also used as evidence of an employee and employer relationship. public policy should encourage companies to support their workers' carrer, irrespective of the relationship. if a company is beholden to all workers, but pay for access to tax business advice, or extends benefits to independent contractors, why would we want to discourage that by insisting that it must also a subject to minimum wage collective-bargaining and unemployment legislation? report, i argue there are three approaches that congress can take to begin modernizing the nation's labor
laws. the best option would be for congress to amend each federal labeor law, by replacing the common-law with a specific piece of legislation. the second approach would be to define a third category of workers, somewhere between an employee and an independent contractor. finally, congress could give platforms devoted to personal services a temporary exemption from most labor laws. the workers of many of these platforms are clearly independent contractors anyway, under the common-law test. the small size of the gig economy and the temporary nature of exemption reduce any risk to the broader labor markets. the world around us is rapidly changing. work arrangements will continue to diversify, as companies respond. congress cannot dictate the shape of future work arrangements. it can however play a large role
in helping workers in the kind of support they need to have good careers that fit into their increasingly complicated lives. thank you again for the opportunity to appear before you. >> thank you very much. we appreciate the testimony from the panel this morning. we will now ask questions. i recognize myself. i will start with you. you testify that more than 60% of your survey respondents did not receive a form 1099k or a miscellaneous form. what changes would you suggest to benefit both workers and the irs? >> i think that the first thing we should do is recognize that the instructions for the form 1099 miscellaneous direct people to use the form 1099k for credit card reporting or payments made by credit cards, and that creates a tax reporting loophole for income that is earned by less than $20,000 because there is a certain income threshold
for using the form 1099k. and i think the irs should medially consider the instructions on the 1099 miscellaneous and see if it can be used for credit card payments the income threshold of $20,000. >> do you have a sense of how many folks are not complying with the tax code, because it is i'm talking about the sharing economy. versus, i'm not one to pay my taxes? caroline: that is a good question. i don't have a hard number on that. but i can tell you anecdotally, when we talk to folks that are in the sharing economy or me talk to tax preparers that specialize -- we talked to tax prepares that specialize in earned income with platform related work, there a medially confused as to whether they had a taxes on the income earned because in many instances, they denied any 1099 at all. >> thank you.
i will move to you now. we heard a lot today about the tremendous projected growth of the sharing economy in the coming years. rabbit's the task estimates, and what you see as having the best growth potential? >> if history is any indication of the future, which we believe it is, year over year to date we are growing at 4x on a revenue basis. we are also growing tasks. we have 15,000 organic applications on a month-to-month basis. both of those indicate that one, we are still in the very early days. and what the sharing economy can do, two, we are a figurehead of growth. >> thank you. mr. reed, i will move to you. we discussed the complexity of all of this, how hard it is to get information, how to figure irs codemply with the under existing code, very
confusing. is it possible that there is some enterprising entrepreneur out there that could come up with an app, form their own company the kind of salt this problem -- solving problem, rather than the government? >> number one, yes. in fact, there have been some early to market applications that attempted to make the switch. one of the real discoveries that we found is that an application that is on your device to help you with taxes is one you likely only turn to at that moment of panic. what we're really seeing now is that the fact you have to do an integrated application, but you need to be able to pull in the itformation from taskrabb into your tax preparation software on an ongoing basis, so you can keep track of it. that leads to one of the confusing elements we have been discussing. if any of these companies were to provide that kind of
interactivity, and that ongoing information flow and the training, well, that might trigger the case of them being considered employees. so on the one hand, while it is difficult to put an application that draws the right information, and in the platforms are concerned about the liability they may take on by providing us the very thing we need to satisfy the first question you asked, how do we get people to pay their taxes? >> thank you. time for one more question. mr. kennedy, even if we were able to government a temporary legislative moratorium on the sharing economy, as you suggested, you correctly point out that there are myriad relevant state and local laws on the sector. how would you address inconsistencies between federal action versus state and local? two tonedy: yes, i say that. the first thing i would say is there is room for increased
dialogue between the states and the federal government about what the common rule should be. we would like, i think ideally, re to be consistency at the federal and state level. encouraging reform at the state level, managing reform at the federal level would be important. and the second is that congress can, to some extent, preempt state law using the commerce clause. there is room for debate about where that line is. fori think there is hope preempting a lot of the state legislation now. >> thank you very much. my time has expired ranking member is recognized. >> mr. kennedy, in your testimony, you touch on this issue. but i like to hear more discussion on it. there is a level of complexity inherent in operating a business that straddles the boundary between wage employment and self-employment. what can be done specifically in
tax law to overcome this challenge? is it creating a new hybrid definition of an employee, or amending the irs safe harbor rule? sorry, myy: i mean, inclination would be to amend the safe harbor rule, to create a brighter line between the employee, where a particular law applies, and where it does not apply, so that people know what side they're on. i think you can also, for people who only make a little bit of money on these platforms, you can raise the threshold so that they do not need -- they still need to report income and pay taxes on it, but they don't need to make quarterly payments. two, think there are hopefully minor, reforms that would make a difference. >> thank you. ms. bruckner, there has been
some concern from traditional brick and mortar businesses about the emergence of the sharing economy business model, and how it affects fairness. while i do not advocate one business model over the other, how do we ensure that actions entrepreneurship through new methods do not disadvantage businesses that invest time and money to conform to existing regulations, when classifying their orders? ms. bruckner: i think the first thing you can do is promote understanding of what your tax filing obligations are. because people view unfairness when they think that other people are not paying their fair share. if we take action on outreach and education, on what income you need to pay taxes on and really promote what your tax filing obligations are, then we are creating an opportunity for people to actually pay their fair share and creating
transparency, and making sure that folks, be they in the sharing economy or working for a brick and mortar business, are both paying their fair share. >> mr. reed, any comments on that? mr. reed: i think what the studies have shown from ms. bruckner and mr. kennedy is that that paradigm of brick and mortar store, as an entity, is almost nonexistent. sure, there is a corner bodega that sells ice cream and sundries that will be isolated. but you will have a mixed economy. i started a bike store when i was younger. i still own part of a bike store. well, we sell part of our equipment online. we get rid of stuff online. we use services like ebay, etc. even your corner independent bike store is probably going to have interaction in the sharing economy. and so, while it is important to
preserve the rights and capabilities of the brick-and-mortar store, we have to understand we are merging into an always connected, always in line, and candidly always selling economy. >> your views on that, mr. kennedy? mean, yeah, i think somebody who is paid $1 million for the medallion in new york probably feels a bit aggrieved. but i think if you look at it objectively, uber is a better model. they are reducing prices, serving neighborhoods that traditionally have not been served so well. and the riders seem to think it is a better experience. so the answer, i think, is not to go backwards to the traditional model, but to free u p the traditional taxicabs and brick-and-mortar businesses so that they can participate more
in online experience. and you see taxicabs actually starting to put out their own apps now. so, reforming some of the traditional laws and regulations would be more appropriate response. >> thank you. ms. bruckner, if workers are found to be misclassified, what other penalties on the tax code would they then be penalized under other laws, like the fair labor standard act, as well? mr. bruckner: our research did not look at the legal implication. we thing that is a part of the debate that impacts a very small segment of the overall sharing economy. and that there are much larger and broader implications for the growing numbers of independent contractors, freelancers in general. our research focuses specifically on the existing tax compliance challenges of those operating as self-employed small
business owners generally. there are absolutely ms. classifications that occur -- misclassifications that occur. and they are extensive legal problems. onus onre putting the the small business owner and with the challenges are. >> the gentlelady yields back. gentleman from new york, mr. gibson, is recognized for five minutes. except he is not here. who is next on our side? ok, the gentleman also from new york, is recognized for five minutes. >> this is a fascinating topic. the underground economy, as you know, is growing. and part of this whole conversation has to do with noncompliance. of said $2.5 billion unreported potential income. but there is unity that the tax code is not encouraging this, is not caught up to the issue. government'she
desire to eliminate the notion of independent contractors, so they all fall under the auspices y that is helping them open this business, right? and yet, that does not solve the problem. , there is and that issue -- i mean, for the irs to go out, and people are not sending to 99s because they don't require them, who is breaking the law here? if they are, how would even know it? let us face it. you are saying people, people are not complying, implying they are uninformed. but we all know we have to pay taxes. we all know that if we have income, we oh somebody something, or at least a report saying that we fell under. but i do not buy that people do
not know they oh something to someone. -- therethink there is incentive to make everybody a private contractor. because look at what you avoid. the whole fica issue, the health insurance, all of those things. so, i think it is a really, getting issue. i'm interested in response you might have, ms. bruckner. who would not want to be like rabbit, saying they are independent contractors and we are not responsible for anybody? that would be ideal for you. you collect your percentage and move on. but yet, it is a problem. it is a big problem. mr. reed? mr. reed: having been a small business owner, on both sides of this, i am sure i would completely agree with the
concept that everybody would love independent contractors. as someone who owned a small business, one of the reasons i hired employees was that i could count on them to be there. as i pointed out, lots of drivers drive for both uber and lyft. you have employees in a state of competition with you, right? constantly offering incentives, find new ways to entice them to stay, not jump ship. one of the event of his you have when you own the business, is that you have the opportunity cost of having them there, but it allows you to -- i think we are making that decision on an ongoing basis. taskrabbit, has employees, don't you? >> thank god, i am one of them. [laughter] >> i agree with you. i am new to this job, right? i get it. but we have to find a way to this incentivize the companies
from doing that appropriately, and at the same time find a way to help people pay what they are owed. because the irs cannot run around chasing down everybody who owes them $500. >> i do not argue that we need to create the right set of incentives for both company and 1099, or taskers, as we call them. but legitimately, right now, taskers are saying they value flex ability the most. they need to be 1099 contractors. one of the factors, to however them filing the taxes or receiving training in any regard, learning have a better ability to work around training.
and that is ultimately one of the barriers to i think the issue we're talking to today, and more broadly how to interact with his workforce in a meaningful way. >> do you agree with that mr. kennedy? kennedy: i would also add that if you're talking about withholding taxes, or providing health care benefits, the economic evidence is that the employee ultimately pays for that in reduced to take home pay. it is not really the employer is benefiting. it is possibly the employee. so, i think there is -- one of the reasons i suggested the temporary exemption is that i think there is a real goal for the companies to come forward in certain areas and have a closer relationship with their employees. and tax is one of them. because all the records are electronic. and so, providing the irs with the information is very, you
companies aree afraid this will come back to bite them later, in the form of a disgruntled worker saying they were misclassified, or agency humming in center dot do this or that. .> worker's comp thank you, chairman. i get all that. what is one last thing, the informal health care act -- the affordable health care act, regardless of how you feel about it, it impacts that in an enormous way. people in marginal positions and income have the potential to have their cost of that particular health grow. it is incredible to me. from what we read all the time, so thank you. my time has expired. >> the gentle lady from california is recognized.
>> thank you ranking members. thisee with my colleagues, is an interesting topic. and certainly, there are a lot of changes underfoot in how small businesses are operating, how they pay taxes, how they impact the consumer. so it is really interesting. one of the things professor you,ner, i wanted to ask because you noted in your 22% of thehat members of the national association of the self-employed responded that they work with an on-demand platform company like uber and airbnb. almost half did not know about any tax deductions, expenses or credits that they could claim related to the on-demand platform income.
and while most of the discussion so far has been whether they are paying taxes, in general, what kind of tax reduction's, expenses, or credits can be claimed for those in that industry? and also, what can we do to many better educate this group on the availability of some of these savings? is a greater: that question. starting off with the most obvious answer, when you drive for a business, in many instances, you can deduct the miles you drive. the question is, do you do. actual miles, or using a standard deduction formula that is in the tax code? in addition, depending on where you work, if you are selling goods online, that you produce outside of your home, can you take advantage of the home tax office deduction? are there startup expenses you might qualify under the code to extend and becoming your small
business? it is really surprising to us that this experience, self identified itself employed population was not aware of the deductions and expenses, and even tax credits that could apply to them. which means that they could be very well leaving money on the table when they go to file their taxes. >> thank you. wileygoing to ask mr. from taskrabbit, i know we are talking about taxes in this session, but i was just want to have the opportunity, since you are here, you know, love the business model, love the concept. if only our kids would do their chores, we would have to hire taskers. [laughter] but one of the concerns, that i think some of us have, is, you know, background checks of those
who are now becoming taskers, coming into our homes. can you walk us through how taskrabbit administers background checks for these taskers? mr. wiley: sure. i think trust and safety, prolifically, is a big priority. it is important to state that, in the marketplace every day. and/or onecruiting boarding taskers is something that we look at everyday to make sure it is the best process possible. in doing so, like i mentioned, 15,000 potential taskers apply the marketplace every month. what that includes, the submission, a form online, with basic contact information, of which we then -- which includes
social security. for, andcurrently pay based on that process, they then come in person for a one hour orientation to learn the processes and procedures of our marketplace, as well as how to answer for app to potential work. >> i'm running out of time. but it is fascinating that we are talking about $35 an hour. i mean, that is like five times the federal minimum wage. that is incredible. you state thousands of applications are coming to you, without any direct recruiting or marketing, in the district i represent in los angeles, you know, there are a lot of folks who are looking for work, many of the neighborhoods are low income neighborhoods. you reach out to some of
those other communities in our country that may be perfect to find some of these jobs? what can you do to help people find some of these good paying jobs? >> it is a good question. we thank you support for the city of los angeles. you are one of our biggest markets. [laughter] well, no comment on that. however, i think you are right. there is more potential opportunity for us to do broader outreach, to have a broader portion of the market of the population find new work opportunities. and we consistently support that with one, a livable wage. that is most important to us. two, the flexibility. doause 90% of our taskers not work full-time in the marketplace, so their love the great new work opportunities. and the third thing, most important, this idea of transfer ability of skills. if we can consistently train
those that work in the marketplace with broader skill sets for them to take on, and in the future, then do bigger and broader things, not only does the existing marketplace benefit, but as the clients receive better services. >> the gentleman from mississippi. >> i appreciate you being here today. i have a kind of very -- people do not like change. and governments do not like change. some of the other comments i have heard, this is a system that works. but it is different. and i think the same thing with overtime rules with small businesses, what governments do not understand, they try to make it fit into their mold, their box, and the net reality is that it does not work in that box. they have to work to adapt the sharing system, and the small
businesses, and not try to adapt them to the rules that apply to everyone else. if we do that, credit for small businesses or sharing economies to be a part of the regular tax assess or agency process, what happens is you fail, because we tried to insert ourselves. we need to change, not ask you to change. what i find interesting is that the interesting -- the syrian the sharingery -- economy is very interesting. it applies as a secondary income, not primary. a lot of time, they are paying taxes in a primary job. they have health care in the primary job. it is very flexible. you hit it. most of them are students, retirees, stay-at-home moms, soldier's wives. people who may be moving locations, or tied to other
duties, so that flex ability of the most important. what can we, as a small business committee, do to make sure the people who want to pay taxes make sure they pay them? but make sure we keep open with flex ability? i start with you, miss bruckner. miss bruckner: we need to be educating other members of congress about the sharing economy, and the fact that it is just not millennial phenomena. if you talk to the platform companies, some of the fastest-growing cohorts they see across the board are baby boomers. this is affecting all sectors of our population. , generally these are people doing this part-time or as a secondary source of income. and hassles they have to face, combined with the tax code obligations, are something we should deftly consider moving forward, how we make life better for the taxpayer going forward? >> any other comments from the panel?
>> i think that one of the key elements we have touched on considerably is ensuring that the irs allows us to provide the training, so that we get these people to understand their obligations. i think it is ironic, here we are having a panel about people paying taxes, and as mr. wiley talked about, we are concerned that in order to make it easier to understand how to pay taxes, we might actually destroy the very business model that allows that flexibility. there is one conundrum out there that exists, and it is the idea that we can find ourselves in the wrong classification, trying to help the iris do their job -- irs do their job. >> i think the sharing economy is great. just like i think small business is great. i sometimes think people are threatened. quit, getting your tail you do not change rules, you get
better. and you steal or copy, whatever you want to call it. i will go back, miss bruckner, in a growing sector of the economy, is or anything this economy can do educationally to inform taxpayers, why we work to make the guidance more clear, here is what we should be doing in the meantime? ms. bruckner: i think the one thing the irs can do is to start working through relationships with third-party preparers and tax preparers, educating them. they do notances, even know how to advise customers that come in and need help with their taxes related to the sharing economy income. i think leveraging the third-party relationships, and increasing outreach and even tax preparers and folks that are engaged in that industry, would be a great start. d, i'll let mr. ree
you comment if there is time. sales tax is a big issue. i think we cannot just say it is better where it originates, or ends up. because a lot of localities, county disabilities rely on that sales tax to inform for services like police and fire department. i think we need a healthy discussion on that to determine what the best answer is. with that, i yield back. .> thank you >> we're talking about the irony of the irs, what we need to do, and the committee i left to come here, currently, the topic there is whether or not we should impeach the irs commissioner, right now. a kind of boggles your mind. that being said, for the record, i will now recognize the good lady from north carolina, ms. adams with the ranking member of