https://onlinelibrary.wiley.com/doi/pdf/10.1002/poi3.237

Conceptualizing the Gig Economy and Its Regulatory Problems

This is a draft of the table of contents and introduction of the forthcoming Cambridge Handbook on the Law of the Sharing Economy (2018). The handbook grapples conceptually and practically with what the sharing economy – which includes entities ranging from large for- profit firms like Airbnb, Uber, Lyft, TaskRabbit, and Upwork to smaller, nonprofit collaborative initiatives – means for law, and how law, in turn, is shaping critical aspects of the sharing economy. Featuring a diverse set of contributors from multiple academic disciplines and countries, the book compiles the most important, up- to- date research on the regulation of the sharing economy. The first part surveys the nature of the sharing economy, explores the central challenge of balancing innovation and regulatory concerns, and examines the institutions confronting these regulatory challenges. The second part turns to a series of specific regulatory domains, including labor and employment law, consumer protection, tax, and civil rights. This groundbreaking work should be read by anyone interested in the dynamic relationship between law and the sharing economy.

The Cambridge Handbook of the Law of the Sharing Economy

In The Common Law Inside the Female Body, Anita Bernstein explains why lawyers seeking gender progress from primary legal materials should start with the common law. Despite its reputation for supporting conservatism and inequality, today's common law shares important commitments with feminism, namely in precepts and doctrines that strengthen the freedom of individuals and from there the struggle against the subjugation of women. By re-invigorating both the common law - with a focus on crimes, contracts, torts, and property - and feminist jurisprudence, this highly original work anticipates a vital future for a pair of venerable jurisprudential traditions. It should be read by anyone interested in understanding how the common law delivers an extraordinary degree of liberty and security to all persons - women included.

The Common Law Inside the Female Body

The gig economy is a phenomenon that is rapidly expanding, redefining the nature of work and contributing to a significant change in how contemporary economies are organised. Its expansion is not unproblematic. This article provides a clear and systematic analysis of the main ethical challenges caused by the gig economy. Following a brief overview of the gig economy, its scope and scale, we map the key ethical problems that it gives rise to, as they are discussed in the relevant literature. We map them onto three categories: the new organisation of work (what is done), the new nature of work (how it is done), and the new status of workers (who does it). We then evaluate a recent initiative from the EU that seeks to address the challenges of the gig economy. The 2019 report of the European High-Level Expert Group on the Impact of the Digital Transformation on EU Labour Markets is a positive step in the right direction. However, we argue that ethical concerns relating to algorithmic systems as mechanisms of control, and the discrimination, exclusion and disconnectedness faced by gig workers require further deliberation and policy response. A brief conclusion completes the analysis. The appendix presents the methodology underpinning our literature review.

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The Ethical Debate about the Gig Economy: A Review and Critical Analysis

https://philpapers.org/archive/TANTED.pdf

The ethical debate about the gig economy: a review and critical analysis

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce compliance burdens for this new generation of business owners, while simultaneously enhancing the government’s ability to collect tax revenue. First, Congress should create a “non-employee withholding” regime that would allow online platform companies such as Uber to withhold taxes for their workers without being classified as employers. Second, the Article proposes a “standard business deduction” for gig workers, which would eliminate the need to track and report business expenses. Although this Article focuses on the gig economy as an illustration of how the workplace has evolved in recent years, the proposals could apply more broadly to taxation of small, individually run businesses. In an era when the use of cash is on the decline and information can be shared rapidly and at little cost, it is time for policymakers to institute a more modern tax enforcement regime for small businesses.

Taxing the Gig Economy

Each year, the government loses hundreds of billions of dollars in tax revenue due to underreporting by individual taxpayers According to standard deterrence theory, policymakers should be able to reduce tax evasion by increasing tax penalties, raising the audit rate, or some combination of the two This Article refers to these strategies as increasing the “monetary cost” of tax evasion To date, budgetary limitations and political hurdles have made these strategies difficult for the government to employ There is, however, another potential means by which the government can improve tax compliance, apart from raising the monetary cost of evasion Empirical evidence shows that people experience some form of psychological discomfort when they are dishonest, which may deter them from cheating This Article proposes employing subtle behavioral interventions that encourage more honest tax reporting by raising the level of psychological discomfort experienced from underreporting I refer to this approach as increasing the “psychic cost” of tax evasion Adopting measures designed to increase the psychic cost of tax evasion, such as making small adjustments to the way that taxpayers fill out their tax forms, could generate much needed tax revenue Moreover, these measures would impose very little administrative expense to the government as compared to traditional deterrence mechanisms like audits and penalties While further empirical research is needed to test how to increase the psychic cost of tax evasion in the most cost-effective manner, this Article proposes a roadmap for beginning that process

The Psychic Cost of Tax Evasion

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The lack of progress over the past decade in reducing the tax gap, particularly the failure to reduce the rate of noncompliance among the self-employed, demonstrates the need for innovative approaches. Recent increases in information reporting likely will have an impact in some areas, but the elephant in the room is the cash economy. Given the limitations of standard deterrence techniques, prospect theory has much to offer in improving tax compliance among small business owners for whom information reporting or withholding is not feasible.A number of economists and psychologists have found that prospect theory is a relevant predictor of taxpayer behavior. In the context of framing, the theory predicts that taxpayers claiming a refund tend to view the outcome as a gain, and thus will demonstrate risk aversion, making them more likely to comply. On the other hand, taxpayers facing a balance due, generally framed as a loss, tend to be risk-seeking, making them more likely to evade. This behavior has been confirmed by numerous empirical studies involving laboratory subjects, and by studies of IRS compliance data covering hundreds of thousands of actual taxpayers.Thus far, the legal community has made little use of this empirical evidence. To fill this gap, this Article proposes a novel approach to target small business noncompliance that relies on the demonstrated connection between tax compliance and the presence of a tax refund. I propose that tax for small business owners be collected on a presumptive basis (what I call "presumptive collection") throughout the year based on principles used in presumptive tax regimes employed by other countries, which impute income based on external factors rather than relying on self-reporting. However, unlike true presumptive taxes, presumptive collection would collect tax on a presumptive basis, but the regular income tax would ultimately apply to determine a small business owner’s final tax liability at year-end, analogous to withholding. Because individuals are more likely to comply if they find themselves facing a refund at the time of filing, the goal of presumptive collection would be to increase the number of small business owners that will face such a frame at year-end.Although not every type of small business would be amenable to presumptive collection, it could be an important additional tool for reducing tax evasion that is targeted at specific industries. If presumptive collection could be applied to groups of identifiable cash businesses that are currently able to avoid information reporting, then policymakers could make significant gains in reducing small business tax evasion.

Presumptive Collection: A Prospect Theory Approach to Increasing Small Business Tax Compliance

INTRODUCTIONThere is untold wealth in America-especially at income tax time.-AnonymousFor many individuals, cheating on one's taxes is perfectly rational.1 The overall odds of being audited are quite low2 and the penalty for un- derreporting is typically just a fraction of the tax owed.3 It should come as no surprise, then, that many taxpayers cheat. But this creates an expensive problem. Individual tax evasion costs the government over $250 billion in lost revenue per year, before taking into account revenue lost by corporate tax shelters or legal tax loopholes.4 This is troubling in any economy, but is particularly problematic in light of the current budget deficit.Why, then, does the government not invest more resources in cracking down on individual tax evasion? Standard deterrence theory indicates that tax compliance can be improved by raising the expected monetary cost of evasion to taxpayers. This expected cost is a simple function of the probability of detection and the fine for evasion: If the government makes it more likely that an individual will be caught cheating or more expensive if that individual is caught, then she should be less likely to cheat. For example, a rational actor would not evade $100 of taxes if she had a fifty percent chance of incurring a $400 penalty (expected penalty of $200) or a five percent chance of incurring a $4,000 penalty (same).5 Thus, according to deter rence theory, policymakers should be able to reduce tax evasion by raising the audit rate, increasing tax penalties, or some combination of both.At first blush, it is puzzling why the government has not employed this seemingly obvious strategy. The answer, in large part, is because it is not necessarily cost-effective from the government's perspective. Audits can require relatively large amounts of time and financial resources,6 and raising the audit rate beyond its current level is generally seen as politically infeasible. Increasing tax penalties imposes more subtle costs, but many scholars have argued that increasing penalties much beyond their current levels is cost prohibitive due to both high administrative costs (such as increased litigation) and the potential "crowding out" of voluntary compliance.7But there is another cost to tax evasion incurred by taxpayers, which may provide a more promising means by which the government can improve tax compliance. Apart from the potential monetary costs, individuals may also experience some form of psychological discomfort when they are dishonest, which may deter them from cheating. This discomfort-we might think of it as guilt-imposes an additional utility cost not accounted for by the standard deterrence model. I refer to this cost as the "psychic cost" of tax evasion, and argue that it should be factored into our understanding of the taxpayer's cost-benefit analysis along with the monetary costs.The idea that guilt might deter people from cheating is not new. The tax literature has long recognized that individual ethics play some role in tax compliance. But past scholarship has portrayed honesty as a fixed personal characteristic, generally assuming that individuals are either inherently honest or dishonest. Recent empirical studies by psychologists and behavioral economists, however, have demonstrated that individual honesty is actually a malleable trait, influenced heavily by environmental factors. While a minority of individuals are completely honest in all circumstances (even if it would be economically advantageous to lie), and a minority of individuals are dishonest whenever it financially benefits them, most fall somewhere in the middle of the spectrum and may or may not cheat depending on the circumstances.8Notably, the level of expected monetary gain derived from cheating is not the sole factor in the decision to be honest (contrary to what deterrence theory would predict), nor is it the most influential. Rather, researchers have identified several non-economic factors that influence the decision to be honest. …

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Kathleen DeLaney Thomas

Papers

Taxing the Gig Economy

The Psychic Cost of Tax Evasion

Taxing the Gig Economy

Presumptive Collection: A Prospect Theory Approach to Increasing Small Business Tax Compliance

The Psychic Cost of Tax Evasion