(John Kartch) – The sharing economy has released an entrepreneurial zeal in legions of Americans who haven’t run a business since their childhood lemonade stand. As it disrupts more industries and expands from hipster enclaves to suburbs and small towns, more Americans are coming to rely on sharing economy income to maintain or improve their standard of living. This presents an enormous outreach opportunity for free-market elected officials and candidates.
That means you, Republicans. Now is the time to visibly and aggressively become the party of the sharing economy. Hustle up and develop the four habits listed below to help earn the votes of your constituents who make a living as sharing economy hosts. For purposes of this article, the term “hosts” is used as a catch-all to describe those who actually provide services in the sharing economy.
1. Go out of your way to get to know the hosts. Listen to their personal story and learn what motivates them. Do this year-round, not just during an election season. The decision to join the sharing economy is often as much about scratching an entrepreneurial itch as it is about making ends meet. Satisfaction derived from creating things of value with their own mind and hands in service to others is a benefit of the sharing economy’s low barriers to entry.
Someone’s dream of opening a bed-and-breakfast upon retirement might be partially sated ahead of schedule by being an AirBnb or FlipKey host. An aspiring chef can experience the joy of welcoming customers — strangers — into their personal kitchens for a home-cooked meal as an EatWith or Feastly host. Dog lovers can earn extra money hosting pets in their homes using platforms like DogVacay and Rover. Others want the freedom to determine their own schedule and turn their vehicles into profit centers, made possible by services such as Uber, Lyft, and Sidecar.
Make it a point to use sharing economy services whenever possible or become a host yourself and gain firsthand experience.
2. Personalize the tax issue. As a Republican you have a built-in advantage on the tax issue and have just been given a golden opportunity to personalize the discussion. Even if hosts invest just a couple of hours per week in a sharing economy enterprise, participation can change the way they view themselves: They are now small business owners. And that means they need to start thinking about taxes a lot more, perhaps year round.
The most recent IRS data (2012) shows that of the 145 million total tax returns filed, 30 million report some form of self-employment income. This number will only grow with time as more Americans earn income in the sharing economy. Newly self-employed Americans suddenly have to pay quarterly estimated tax payments to the IRS. No more automatic paycheck tax withholdings they never see in the first place. Now they feel the pinch each time they write the quarterly check. They can cut a physical check or use the IRS’s new Direct Pay online payment tool, but either way they are paying up.
And their actual tax burden is now much higher because they have to pay self-employment tax. Hosts are liable for both the employer and employee portion of Social Security tax (6.2 percent each) and both halves of Medicare tax (1.45 percent each) for a total self-employment tax of 15.3 percent. When combined with federal and state income taxes, the marginal tax rate on sharing economy activities can easily exceed 40 percent.
Tax complexity also comes into play as hosts now have to acquaint themselves with new tax forms and keep track of receipts as evidence to claim business deductions. They face a heightened chance of being subject to an audit. Dealing with the IRS is no longer a once per year hassle. Audibly feel their pain.
3. Personalize the healthcare issue. Many newly self-employed hosts will have to purchase their own health insurance for the first time. Obamacare has made this is a more daunting and costly experience. For 2014, Obamacare increased the cost of individual market premiums by an average of 49 percent according to a 3,137-county study by the Manhattan Institute.
As a result, hosts will be more likely to purchase lower-premium, high-deductible healthcare plans with a Health Savings Account. HSA owners are more likely to take active management of their healthcare decisions than those in traditional plans and are thus more aware of costs.
The authors of Obamacare turned over every rock in search of more tax money and socked HSA owners with a ‘medicine cabinet tax’ that prevents them from using HSA funds to purchase over-the-counter medicines. Before Obamacare, Americans could walk into their neighborhood drug store, slap down their HSA debit card and buy cold and flu medicine, pain relievers, antacids, children’s vitamins and hundreds of other everyday health products using pre-tax dollars. Republicans should hammer Democrats on this kitchen-table issue that affects and annoys millions of families.
As a candidate who has already immersed yourself in the host community you’ll have plenty of other real life tax and healthcare examples to highlight.
4. Finally, mention sharing economy companies by name. As a tactic, mention sharing economy company names when out on the stump. Such remarks are likely to get media coverage and let sharing economy users and hosts know that you are thinking about them. With the launch of its UBER petition, the Republican National Committee wisely sent a strong signal to hundreds of thousands of ridesharing customers and drivers. Candidates and state and local parties should follow suit.
Many Americans do not feel comfortable posting anything remotely political on their Facebook page. But check your news feed any time a (usually Democrat-run) local government tries to shut down ridesharing apps and note the ubiquitous pro-UBER Facebook items posted by your conservative, progressive, and independent friends alike. This is an opening to reach audiences who normally tune out politics and politicians.
The votes of sharing economy participants are up for grabs. Feeling a personal stake in public policy, a critical mass of voters will be open to calls to rein in the tax and regulatory excesses that get in the way of their pursuit of happiness. Republicans, make your move.
(Mr. Kartch is Director of Communications for Americans for Tax Reform. This column was originally published at Forbes.com on September 15, 2014)