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Why the gig economy means nations will soon find taxation more taxing

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The world is her office

The world of work is changing as the gig economy – and the self-employed themselves – go global. That will leave a big hole in countries’ coffers, says Dominic Frisby.

Governments around the world have got a big problem on their hands. I wonder if many of them even realise it. What has been their biggest source of revenue for years is going to get that much harder to collect, just as their needs, whether to cover spending programmes or service debts, grow more pressing.


Across the developed world, 50% of government revenue comes from income taxes. The relationship between employer and employee has proved easy to tax: the levy is deducted at source. But that relationship is changing.

In the UK, the number of people working for themselves has grown by 50% since 2000, compared with a 6% rise in employees over the same period. London’s gig economy has grown by 73% since 2010. But this is a global phenomenon. In Europe, Australia and across Asia there are similar levels of growth. By 2030, says EY (formerly Ernst & Young), a full 50% of full-time US workers will be contingent.

Get ready to gig

In 1990, the three biggest companies in Silicon Valley employed over a million people. Today, the three biggest – Facebook, Google and Apple – have a combined market cap over 60 times higher, yet have a quarter as many employees. The largest taxi company in the world, Uber, has just 16,000 employees. The largest accommodation provider, Airbnb, has 9,053. Yet how many giggers find work as a result of Silicon Valley giants?

Some have criticised the gig economy, saying it exploits people and does not give them the protection they deserve, but surveys show much higher satisfaction levels among the self-employed than among the employed. The large majority of giggers want to stay in contingent work to progress their careers. As we live longer lives many more of us will pursue gig work in what was previously our retirement. Many will embrace multiple income streams as machines – whether artificial intelligence (AI), robot or algorithm – replace blue- and white-collar workers. Employers like it too. Freelancers dramatically reduce the costs and other burdens of employment.

The tax implications are considerable. First, there is the loss to government of employment and payroll taxes, but far bigger is the problem that income taxes will get harder to collect. At present there are few systems in place to deduct tax at source from contingent workers. There is vast scope for non-compliance, whether accidental or deliberate. America’s Inland Revenue Service already attributes 44% of its $450bn annual tax gap to the improper compliance of individual business income. In the US, 69% of freelancers surveyed did not even know they had to file quarterly returns.

Chasing the self-employed

A review of employment practices commissioned by former prime minister Theresa May found that self-employed workers typically pay £2,000 a year less in tax than employees in equivalent jobs. Given that someone on the UK average salary of £27,500 would pay about £5,300 in income tax and national insurance, this is no small loss.

The response will be to raise taxes for the self-employed and to re-regulate those who employ them. Already UK freelancers who hire themselves out through limited companies have had their dividend taxes increased, while flat VAT rates for the self-employed have also been altered. Meanwhile, employers such as Uber and Hermes have come under pressure through the courts by those seeking to redefine full-time employment and gig work. Tax authorities will, I suspect, try to find ways to deduct presumed income at source from the platforms providing the work and then leave it to the individual to claim back the difference – much as withholding tax currently works in the US. But none of this is as clean and simple as old-school income tax.

Tax systems, built around a physical economy, have struggled with the intangible, globalised economy. Look at the problems they have with the likes of Amazon, Facebook and Apple. What happens when workers themselves globalise? One estimate is that by 2035, a billion of the world’s six billion people will be “borderless”, working via the internet in multiple jurisdictions and never spending more than 183 days in any given one. Many will use borderless crypto money, often the most efficient system of payment across the internet, which itself is hard to tax and regulate.

The nations that adapt soonest to the realities of the new, digital, globalised economy around us will be those that thrive best. I don’t see a single British politician talking about, let alone preparing for, any of this.

• Daylight Robbery: How Tax Shaped Our Past And Will Change Our Future by Dominic Frisby, Penguin Business, £20. Audiobook on Audible.co.uk. Signed copies are available at dominicfrisby.com



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Comedian Hannibal Buress working the drive-in circuit, starting with North Ridgeville gig | Entertainment

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A calming voice during the chaos of life.

That’s what irreverent and satirical comedian Hannibal Buress brings to the stage.

Nowhere was this comedic aesthetic more on display than at one of Buress’ favorite Northeast Ohioappearances. His memory of the 2013 show at the Grog Shop in Cleveland Heights remains as vivid as ever.

“At the time, I was doing my song ‘Gibberish Rap,’” said Buress, calling from the Chicago. “I was really into the production of it, so we hired a lot of local costumed characters in each city. In Cleveland, we got this Incredible Hulk who was really dancing. I think we also had a Mario.

“(Lorain-based comedian) Ramon (Rivas II) had a couple of friends agree to come on stage and do balloon animals. It was chaos. That was a fun one. I had a great time.”

Getting his start nearly 20 years ago, the Windy City-based comedian’s resume includes brief stints writing for “Saturday Night Live” and “30 Rock.” He also appeared in the hilarious “The Eric Andre Show” and feature film “Spider-Man: Homecoming,” as well as made the late-night talk show rounds.

While Buress wasn’t the first person to speak out about rape allegations against Bill Cosby, it was his viral set that started the dominoes to fall and helped lead to “America’s Dad” going to prison. (Unfortunately, Buress’ publicist requested no Cosby questions in this recent phone interview.)



Hannibal Buress-v

Comic Hannibal Buress says you’re not looking for jokes related to the novel coronavirus pandemic, so he’s not doing any. 




That turned out to be just fine because the timing of his most recent special “Miami Nights,” which debuted on YouTube this summer, couldn’t have been any more apropos considering the current climate in the country.

The centerpiece of the special is his unlawful 2017 arrest in Miami.

“There are some people in those positions, police officers, who aren’t really emotionally suited to be in the spot — including this guy that I interacted with,” Buress said. “With everything that’s happening, it forces them to really look within at how people are being evaluated when they go into those positions, because it’s a very important position. You want folks who are stable.

“The thing with [the police officer who arrested him] is he had been disciplined. He had off-duty incidents where he ran from the police. He was a fugitive, and I got arrested by him somehow. It’ll take some time for things to fix themselves, but there’s a lot of work being done and there’s a lot of work to do.”

Speaking of work, Buress remains as busy as possible during the pandemic. Not only did he recently release the first episode of his new gambling-centered podcast, “Splitting 10s,” but he’s also looking to get back on the road.

Buress’ “Let’s See How This Goes” drive-in theater tour kicks off in Northeast Ohio with a gig Sept. 22 at North Ridgeville’s Auto-O-Rama Twin Drive In.

Mind you, Buress admitted it’s been decades since the last time he visited a drive-in theater, but everyone has to get a bit out of his or her comfort zone these days.

“I saw that Marc Rebillet and Bert Kreischer did a drive-in theater tour, so I decided to try it out,” Buress said. “It’s something new. Some comedy clubs are open, but you’re not really able to do full capacity. The drive-in-show experience is still something that’s kind of fresh, so I think it’ll be dope for people.”

While fans attending the show can expect new material, there’s one fresh topic he won’t be talking about. Buress said he doesn’t have any COVID-19 material.

“Hell, no,” Buress laughed. “Nope. No pandemic jokes. People don’t want to hear that.”

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Gig workers like and want flexibility, that’s why they became gig workers – Orange County Register

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Are gig workers ⁠— think Uber drivers or Door Dashers ⁠— seeking to trade their flexible occupations for a full-time, 40-hour-week job?

Two recent surveys suggest they’re not interested. A survey of 1,000 on-demand drivers, commissioned by Uber and conducted by a duo of polling firms representing clients on the political left and right, finds that 85 percent prefer some version of their current flexible arrangement. Another survey ⁠— this one of 1,000 independent contractors, and commissioned by Lyft ⁠— concluded that 71 percent want to retain their current status.

Both surveys suggest that workers are happy with their “gig.” Don’t tell that to labor unions and their allies. To bolster their opposition to Proposition 22 ⁠— an initiative on the fall ballot that would solidify on-demand drivers’ and shoppers’ status ⁠— labor has pointed to a handful of comforting studies suggesting that gig workers are exploited.

The first, released through a San Francisco city commission, claimed that most gig workers work full-time schedules and earn poverty-level wages while doing so. But records requests, reported by the Washington Free Beacon, discovered that this conclusion was based on a convenience survey of respondents identified by a labor group–many of whom were paid for their answers. The study organizer acknowledged that the survey–which was drafted to “support organizing” ⁠— was “not representative” of gig workers’ experiences.

Speaking of unrepresentative: Labor and its allies have also hinged their case on a 2019 working paper from Veena Dubal, a law professor at the University of California-Hastings. In her paper, Dubal dismisses the numerous statistical surveys showing that on-demand drivers don’t want to be employees. Her own conclusions are based on “unstructured conversations with drivers in driver organizing meetings” ⁠— among other unrepresentative sources.

Got that? Having sought out the unhappy few among the on-demand shopper and driver community, Dubal concludes that all drivers in the state must feel similarly.

This anti-empirical stance by labor and its academic allies, and their unwillingness to acknowledge that shoppers and drivers prefer their “gigs,” has dangerous consequences.  In a recent legal brief, rideshare company Uber described in damning detail what would happen should it be forced to convert its independent drivers into full-time employees.

An estimated 75 percent of current drivers would lose access to the Uber employment model–resulting in one million lost employment opportunities. (The legal brief notes that these facts are undisputed by the company’s opponents.) Prices would increase for riders by anywhere from 20 to 120 percent; the company further explains that “at least a quarter of rides would no longer be available, with certain cities experiencing a decrease of 40-60 percent.”

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Collaboration in the Gig Economy keynote day one

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18 September 2020

Hiring managers already have a much more complex choice than in the past. It’s not just whether to hire a traditional employee to get a job done — the procurement supply chain is much larger. Today’s choices include using a staffing agency temp, engaging an independent contractor, calling in an SOW consultant or turning to an online work platform. And technology continues to bring changes — with Covid-19 speeding up the evolution.

“I would argue that times of crisis and times of change, like we are in today, will help propel the next stage of digital transformation,” SIA President Barry Asin said in a keynote speech Thursday kicking off the Collaboration in the Gig Economy virtual conference.

Asin cited technological change wrought by the last recession: In 2007, only 24% of large companies had a VMS in place at its start in 2007; by 2020, the percentage had grown to 64%.

Fast forward to today — there was $1 billion in venture capital funding focused on the HR tech space in the second quarter alone.

Large companies that use staffing are more and more turning to tech. SIA data found 43% of large staffing buyers foresee an increase in usage of online staffing/talent pool in the next 10 years. Evolving concepts such as direct sourcing are already used by 30% of buyers, and 49% plan to put a direct-sourcing program in place within the next two years; much of it fueled by new tech offerings.

“I think that what we’re seeing — particularly for the traditional service providers in the talent supply chain — is a real digital transformation, and the current crisis is accelerating that digital transformation,” Asin said. “And it’s accelerating it for all the players involved at the different points of that supply chain.”

Already, 54 million Americans did gig work in 2019, approximately 34% of workforce, according to SIA data. That amounts to $1.3 trillion in spend with the largest share going to independent contractors. SIA defines the gig economy as including all types of contingent work, including

  • staffing agency temporary workers
  • SOW consultants
  • directly hired temporaries
  • online platform workers
  • independent contractors

The Collaboration in the Gig Economy Conference brings together all parts of the ecosystem to talk the latest trends and advances. Attendees include enterprise buyers, staffing suppliers, VMS/MSP companies, human cloud/on demand platforms and technology solutions providers.

“There is a wave and a transformational change that we are seeing in society,” Asin said. “Many of you are on the leading edge of that change.”

The virtual event continues through today.

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