Democrats are reportedly considering including tax relief for union members in their $ 3.5 trillion budget resolution currently awaiting House approval.
The proposal would allow workers to deduct union dues from their taxable income. The working groups were push for its inclusion and, according to The HuffPost, lawmakers are considering the proposal.
Labor organizers also encouraged Democrats to make the “above-the-line” deduction, which means taxpayers could take advantage of the tax law whether or not they itemize their deductions. The policy, if adopted, could help encourage union membership by defraying the cost of union membership.
It could also help level the playing field between union members and companies, union activists support. While employers can deduct the costs of anti-union efforts, workers currently cannot deduct union dues, which means workers bear an unfair burden.
“In other words, workers cannot deduct a significant cost to earn their income”, wrote Alexandra Thornton, senior director of tax policy at the Center for American Progress, in 2019, “as employers can deduct the costs of maximizing their profits at the expense of workers.”
This is in part due to the Republicans’ tax overhaul in 2017, which was one of the the biggest rewrites of the US tax code in history. Republicans removed an earlier version of a tax break for union members that allowed workers to deduct union dues if they produced itemized deductions. The tax deduction could only be used if the contributions represented more than 2% of a taxpayer’s gross income.
The current proposal would be a step up from the previous tax benefit, allowing taxpayers to deduct union dues regardless of their filing status if Democrats pass the “over the line” proposal.
Democrats indicated in the public documents that the reconciliation file will include “[p]worker incentives and worker support ”, although details are unclear at this time.
Senator Bernie Sanders (I-Vermont) also previously indicated that parts of the pro-Union Democrats legislation, the PRO Law, are included in the reconciliation package. Again, it is unclear what proposals are in the legislation, as lawmakers are still in the process of crafting the final text of the bill. But, combined, these proposals could help boost union membership in the United States.
Companies often alarmist about union dues to their employees, saying that union membership is expensive and therefore not worth it. However, research shows that union members are paid 11.2 percent more than non-union workers, according to the Economic Policy Institute, with better access to benefits such as health care.
But corporate alarmism against unionization is still often successful. Amazon, the country’s second-largest private employer, has used aggressive union-busting techniques earlier this year delay an organizing drive at an Alabama warehouse. Although the National Labor Relations Council announcement This month when Amazon broke the law in the Alabama countryside, businesses often face little to no consequences for illegal anti-union activity.
The stable weakening labor laws in the United States has led to a decline union membership in recent decades. Whereas the union affiliation of American workers hovered around 30 percent in the 1940s and 1950s, in 2020 the unionization rate was only 10.8 percent, a continuation of a steady decline that began in the 1960s.
The deduction of union dues could help combat some corporate anti-union tactics by helping to offset the cost of union membership. In conjunction with other pro-union laws, like the full passage of the PRO Act, Democrats have the opportunity to help reverse the decline in union membership.