According to a widely circulated email from the Freelancers Union, on Thursday, January 15, New York City Mayor Mike Bloomberg called for a tax cut for freelancers. New York City is rife with freelancers, and less common, but still present, are billionaires; rarely twain the two paths cross.
So in a refreshing turn of events, Mayor Mike sided with the underdogs in his call to reduce taxes on the same freelancers, including citizen journalists and bloggers like this one, who help shape the larger construct of public opinion in the online community. This move by Mayor Mike was a good one because more and more the Internet is from where people get their information; this has strangely become more and more important than what actually may be true.
In New York City there is a tax that is directly geared at the freelance jugular; the Unincorporated Business Tax (UBT) – so many freelances dread every April and jump through a variety of hoops to get around being overtaxed by local and federal governments. Most often, freelancers are paid via the 1099 and don’t have taxes taken directly from their earnings. Therefore many freelancers spend the whole year, every quarter, taking their estimated earnings for the last three months and making timely payments to avoid the boogey man that is the Tax Man in April.
This Unincorporated Business Tax doubles taxes on freelancers, requiring more than 17,000 New York City freelancers to pay twice the tax that traditional employees pay. Mayor Mike, in his State of the City address, condemned this tax and voiced his disagreement with exempt independent workers having to pay the Unincorporated Business Tax.
Mayor Mike’s displeasure with this Unincorporated Business Tax also has the support of New York City Council Speaker, Christine Quinn and New York City Comptroller, William C Thompson Jr. This would, by all accounts, ordinarily lead many to believe that this plan is as good as done. However it’s not going to be so easy. Politics is politics and even the mighty billionaire Mayor Mike is not immune to the sting of the New York State Legislature. While this Unincorporated Business Tax debate was important enough for Mayor Mike to mention in his State of the City address, it may not be as important for those budget makers in Albany whose pen holds the final decision.
If you are a freelance worker in New York City and you’d like to stand tall behind Mayor Mike and his calls for the removal of the Unincorporated Business Tax, you can click this link to show your support.