TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, September 20, 2018

Viswanathan Presents A Worker-Centric Model For Sharing Economy Providers Today At Northwestern

Viswanathan (2017)Manoj Viswanathan (UC-Hastings) presents A Worker-Centric Model for Sharing Economy Providers at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

In light of ambiguities in the December 2017 tax legislation, this Article integrates tax, corporate, employment, and labor law to propose how sharing economy workers—and rideshare drivers in particular—might optimally structure their working lives. These workers already face challenging questions about employment conditions, collective bargaining, and their classification as employees or independent contractors. The new tax legislation has only created more questions about how this growing class of income earners should most efficiently structure their working arrangements for tax purposes.

As some commentators have noted, questions about tax efficiency cannot be answered in a vacuum. What’s best for a worker’s taxes might harm other important aspects of a worker’s prosperity. For example, minimizing taxes by working as an independent contractor might result in lower social security payments post-retirement, or decreased bargaining power with powerful employers. These different aspects of well-being should all be considered when choosing how best to structure one’s working life.

As illustrated though the example of rideshare drivers, this Article proposes that workers could maximize their tax benefits—and their opportunities for prosperity on the job—by organizing as individual or collective S-corporations, which could then join together as members of a 501(c)(6) business league. This arrangement would not only reduce rideshare drivers’ tax burdens, but could also provide a vehicle for drivers to collectively advocate for improved labor conditions.

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