Why the Home Occupation Tax Reminds Me of Sharecropping
It’s Black History Month and it’s also tax season. If you think I couldn’t find a way to relate the two, think again.
My great grandfather was a sharecropper. I know this because we talked about growing cotton before he died. That is all he ever did and he was good at it.
He considered it a point of pride, because his father was a slave, and did not have the opportunities to ‘live away in your own house.’ Instead of working on the plantation under the eye of an overseer, my great grandfather Willie plowed ‘his own’ land the way he knew how to, while his wife raised 10 children and a grandson to help him.
In my young eyes, Willie’s simple business was no business at all. He paid to live on the white landowner’s land. He paid for supplies, and he received less payment for his work because any former slave could grow cotton.
Opportunity at a High Cost
Every morning, my young grandmother, aunts and uncles struggled to find food and stay warm in a house the size of my bedroom because Willie did not make enough to buy food after paying all of their ‘business expenses.’
For my family, there was no Great Depression. There was only that period between when we moved off of the plantation and when the civil rights movement made it easier for my parents generation to attend college. Economic prosperity never reached my family, so we didn’t really notice when everyone else started suffering.
My not too distant ancestors were victims of an agricultural-based economy that had just had its permanent workforce forcibly removed. Yes, they were allowed to work — but they were not going to be allowed to profit.
Does the Work at Home Freelancer Face a Similar Fate?
Without understanding my personal connection with the sharecropping economy, it may be hard to image why I might compare freelancing in America to sharecropping in the American South. In fact, to even be able to follow this analogy, you have to first accept the following beliefs:
- Less than living wage employment is similar to slavery because it puts people into an economic bondage that is increasingly difficult to escape from.
- Salaries are designed to increase the productivity of workers, many times leading to 60 hours + work weeks, reducing the familial quality of life — similar to the effects of slavery on the African American family quality of life.
- Americans who are not employed or unemployable are stigmatized and often end up incarcerated. (Similar to how African Americans who were not slaves, were always at risk of becoming slaves again.) More about that relationship can be found here.
If you can see how modern day employment shows some similarities with the slavery that existed in the American South, it is a bit easier to see how freelancing could show any similarities to sharecropping. However, just for fun, here are some of the things I see:
- The ability to deliver a product or service on your own terms
- The ability to work while having your family with you
- The responsibility to cover all business expenses
That’s the American dream, right?
Well, here is why it starts to feel a bit like sharecropping….
Freelancers regularly get taken advantage of.
Using tactics such as overcharging for business necessities, devaluing the product based on competition, and sometimes flat out lying and cheating, American freelancers are constantly struggling to get paid enough to support families.
I had known this before I entered the freelance economy. I believe it is perfectly understandable that there should be some competition when you run a business online. I was willing to earn my ranks, competing at a global level for projects alongside freelancers that could deliver similar products at a lower cost. This competition allowed me to develop into the high-quality freelance service provider that I have become. This is not the reason why it reminded me of sharecropping.
The Government Wants In
Last year, I decided to register my freelancing services as a business. I did so because it seemed like a symbolic step toward keeping my growing freelance business separate from my family. It also helped me take my freelancing more seriously. Although I had always reported my income and paid the appropriate taxes, it wasn’t my sole source of income until 2015.
Soon after I made the symbolic step into entrepreneurship, I received a surprising letter. My city was billing me for $200 because I was running a business out of my home.
“The Home Occupation License, they explained, is an inexpensive option for small business owners living and operating from a residential unit.”
Great. I decline that option.
It went on to continue,
“These standards were established to ensure that the outside appearance of the dwelling and residential property is not significantly altered to fit the business needs and that business operations do not disturb the neighborhood.”
So my question logically is this:
How does an online freelancer, or perhaps even, an online business with no inventory, disturb a neighborhood?
No one in my city’s tax department could answer that question. It was simply, “just pay the tax”.
The clerk’s dismissiveness, combined with my desperation to make money the best way I know how immediately reminded me of sharecropping. Like Grandpa Willie, I was happy not to be ‘in slavery’, but sometimes, it feels like the odds are stacked up very high against me ever finding success. As big businesses continue to drive up profit by underpaying employees, abusing the freelance economy, and driving down rates, many freelancers are forced to lower their rates to stay competitive. At the same time, government hears of this ‘profitable freelance economy’ and swoops in to grab any revenue they can get their hands on in order to support their struggling budgets.
The truth is, most work-at-home freelancers struggle to maintain healthy working environments, high-speed internet, and up-to-date equipment, on top of the self-employment tax and required health insurance. Add in marketing expenses and you’ve got a business model that’s no longer a guaranteed profit. (especially with internet marketing — by now, we all know how profitable search engine marketing products has been for Google…..)
Are internet based home occupations posing so much of a hardship for local communities that it should warrant an additional fee?
I don’t think they do. Instead, I believe that similar to what occurred in history, we are witnessing an attempt to revitalize the nation on the backs of those that are merely trying to survive rather than those that can afford to fix it.
Jenn Marie is the owner of Freelance America, an online community dedicated to the discussion of topics affecting American Freelancers and the entrepreneurs and small business owners that work with them. She also coaches creative freelancers looking to launch their online brand and assists business owners in building a freelance team.