Democrats Propose Tax Reforms To Boost Union Membership, Discourage Union-Busting

Sen. Bob Casey says the changes would help “level the playing field” between workers and employers.

Senate Democrats plan to introduce a pair of bills Thursday that could encourage more union membership and make it more costly for employers to crack down on organizing efforts.

The legislation rolled out by Sen. Bob Casey (D-Pa.) would use tax law to accomplish those goals. One bill, which has 40 cosponsors, would restore a tax break that union members enjoyed until Republicans overhauled the tax code under former President Donald Trump.

The other bill, which has 27 cosponsors, would bar employers from deducting the cost of anti-union campaigns as a business expense.

Casey, a member of the Senate committees overseeing tax and labor policy, told HuffPost that the proposals would “help level the playing field for workers and empower them to exercise their right to organize.”

Casey said in a statement: “These are commonsense steps to restore fairness to our nation’s tax code and stop rewarding corporations’ bad behavior when taking advantage of hardworking Americans and their families.”

The legislation is largely symbolic since it’s all but certain to fail in the GOP-controlled House of Representatives. And Senate Democrats omitted the legislation from the two bills they could muscle through the chamber without Republican support last year. But the proposals reflect some ways Democrats hope to strengthen unions through policy reforms large and small.

“One bill would forbid tax deductions for the money employers spend on anti-union consultants.”

The GOP tax law of 2017 brought about many changes for filers. Workers lost the ability to write off expenses tied to their jobs, like the cost of uniforms, tools, travel or, for those in unionized workplaces, their union dues. The Tax Fairness for Workers Act would bring back those deductions and tweak the union dues piece in a significant way.

The tax break for dues would be “above the line,” meaning workers could use it to reduce their gross income whether they itemize their taxes or not. That feature is significant because fewer filers itemize their taxes these days after the GOP law significantly raised the standard deduction.

Sen. Bob Casey said taxpayers shouldn't "subsidize" anti-union spending by businesses.
Sen. Bob Casey said taxpayers shouldn't "subsidize" anti-union spending by businesses.
Leigh Vogel via Getty Images

The No Tax Breaks For Union Busting Act would end what Casey calls a “tax subsidy” for employers that try to throttle organizing campaigns. Businesses can deduct expenses considered “ordinary and necessary” in the course of their operations, but Casey’s bill would expressly forbid deductions for expenses tied to influencing how workers might vote in a union election.

Employers facing union drives spend a lot of money on high-priced consultants who try to persuade workers not to unionize. However, there does not appear to be reliable data on how often employers deduct those costs as a business expense. Casey’s legislation would make anti-union electioneering akin to regular political activity, which is not tax-deductible under the law.

“Congress should extend that principle to spending done by employers to influence workers’ elections and collective bargaining decisions,” the bill text reads. “These free choices to exercise the rights to engage in collective bargaining… should be made without taxpayer subsidies of undue outside influence from employers.”

The number of union election petitions by workers has shot up recently, and workers have managed to form the first U.S. unions at a number of high-profile employers since 2021, including Starbucks, Amazon, Apple and Trader Joe’s. But overall, union density is hovering near a historic low of around 6% in the private sector, down from a high of roughly 35% during the 1950s.

“These are commonsense steps to restore fairness to our nation’s tax code.”

- Sen. Bob Casey (D-Pennsylvania)

Democrats have proposed both modest and sweeping reforms to help turn the tide in unions’ favor.

Most notably, they have tried to pass the Protecting the Right to Organize Act, or PRO Act, which would amount to the largest overhaul of U.S. labor law in over half a century. The law would create financial penalties for illegal union-busting; effectively repeal state “right to work” laws around the country; strengthen the right to strike; and make it vastly easier for workers to secure their first union contracts.

Democrats managed to get the PRO Act through the House in 2020 and 2021, but the bill failed to gain enough support from Republicans and centrist Democrats to pass the Senate.

The pro-union tax proposals are not nearly so sweeping, but Democrats say they would create a more equitable tax code between workers and businesses.

The left-leaning Center for American Progress Action Fund said in a 2020 policy paper that lawmakers should bar tax deductions for anti-union campaigns because such efforts conflict with another federal law, the National Labor Relations Act (NLRA), which promotes collective bargaining in the private sector.

“Although companies may have the legal authority to engage in anti-union campaigns,” the authors wrote, “there is no public policy justification for having taxpayers subsidize such conduct, especially when you consider that the express purpose of the NLRA is to encourage collective bargaining.”

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