1099-K from PayPal (tax form)

I'm glad someone brought this up.
PayPal did this to me this and last year.

Can someone explain to me how it is legal to tax me for selling a product that I previously purchased new, and paid sales tax on, with money I was already taxed on when I earned it?

Last year they added what I sold off to my income which put me in the next tax bracket and I got hardly any tax return.

Better yet, can someone tell me an alternative for payment that we can trust and that won't rob us like this?

Forget this notion of "tax brackets". With very few exceptions, taxation is incremental. I.e. earning a bit more does not mean everything else if taxed more. Only that extra you earned is taxed at a higher rate than everything else. This is not a new concept.

Not only legal, but it has pretty much always been this way, the only difference is in the past, the government has not had the means to track and collect. Now effectively they do.  Most states have had taxes on used cars, boats, etc., anything where a transfer of ownership has to happen and can be tracked.

Thanks to all who posted very informative.  Also I'm amazed that there is not a "cost basis" associated with this "income" in the IRS doc.  Jeez.

I too used TurboTax for years until it got too complicated, my taxes that is.
Best thing is get a local CPA and do some tax planning as well, pays for itself.  

@audio2design
Let me rephrase that as "income range"

In addition to the OP problem, PayPal reported all my proceeds even transactions that were immediately canceled and refunded before any merchandise changed hands. This has the effect of overstating my taxable income by $7,000. I have been trying to get PayPal to send me a corrected 1099.

My advice is if you get a 1099 from PayPal, check it carefully to make sure they aren't overstating your income.