PRO Act's ABC Test
will increase taxes
President Joe Biden pledged that his plans would not raise taxes on anyone making less than $400,000 a year. However, the ABC Test, hidden in the Protecting the Right to Organize (PRO) Act — which is hidden in his infrastructure legislation — converts many (most) independent contractors (including Realtors) to employee status.
Unlike independent contractors, who can deduct their legitimate business expenses, the Internal Revenue Code does not allow employees to deduct their legitimate business expenses. So independent contractors converted to employee status no longer will be able to deduct their legitimate business expenses.
The loss of tax deductions results in owing more in taxes. Thus, despite his pledge to the contrary, Biden is attempting to impose a massive tax increase on many who make far less than $400,000 a year.
This is another broken promise — but if Republicans were doing this, it would be called a “lie.”