For some types of services, once you've found a person who does good work, you can privately ask them if they'd like to cut out the middleman: they get a pay raise and you pay less. This is particularly relevant for online services that find a professional for you.
I agree with the general point though: That we should tax land more, and labour less.
Because taxing labour creates the kinds of inefficiencies where I need to work for two hours to afford somebody else to work for one hour.
> The middleman being the IRS?
Only to the extent the money may get taxed 2-3 times on its way to the actual person doing the work (which may or may not be the case in any particular instance). (For instance, sales tax and multiple levels of income taxes.)
> we should tax land more, and labour less.
Agreed.
The idea starts to make a lot of sense once you look at its framing. This includes the argument you make above (why can't you hire help out of pre-tax income, like any other business can?) and more on the legitimacy of taxation.
Leaving aside the obvious fact that your personal activities are not a business[0], you can indeed hire help out of pre-tax income -- in the U.S. no one pays income tax on their gross income, only their taxable income. By the time common tax credits are factored in, a married couple with children may easily have $30-40K of gross income each year not subject to income tax.
Many, if not most, homeowners do not need to go out and work extra hours to pay someone to do work to repair their property, any more than they need to work extra hours to pay for food and clothing, so looking only at the marginal tax rate is misleading (as in the example above of earning an extra $167 to have $100 after tax).
Further, work you pay for that improves the property (as opposed to repairs) is added to the tax basis of the property, reducing future taxable income when the property is sold. Along with the potential to exclude up to $250K/$500K (single/married) of gain[1] from selling the property is a huge source of pre-tax income.
[0]and even businesses can only deduct expenses for people they hire for services that are related to generating a profit.
[1]Section 121 exclusion
So that's about 30% gone right there for engaging in labor trade before you even consider income tax
On its face, that doesn't seem to stand up to scrutiny.
When I first heard of it, it seemed like it literally described the very same economic model we're accustomed to. But now that you mention this, there does seem to be an underscore of "just 2 guyz who are having a good time", without proper accounting of the exchange of value, thereby making it difficult to prove that a taxable event occurred.