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https://www.wsj.com/articles/a-tax-break-for-union-dues-labor-house-democrats-budget-bill-11637689873?mod=itp_wsj&mod=djemITP_h

Union members gather for a rally.

By 

Nov. 25, 2021 4:43 pm ET

Photo: justin lane/epa-efe/rex/shutters/EPA/Shutterstock

The bill the House passed would allow union members to deduct up to $250 of dues from their tax bills. The deduction is “above the line,” meaning filers can exclude the cost of dues from their gross income. In other words, union dues would get the same treatment now reserved for things like insurance premiums and retirement contributions. The deduction would last through 2025. The Joint Committee on Taxation estimates its cost at $1.8 billion.

Supporters frame the tax break as relief for workers. “Unions are the backbone of the middle class,” said Democratic Sen. Bob Casey while introducing a similar provision in April. “This legislation would put money back in the pockets of working families.” 

Yet only 11% of the U.S. labor force belongs to unions, as of the last count from the Bureau of Labor Statistics, and only 6.3% of the private workforce. The biggest beneficiaries of the tax break would be workers who belong to government unions such as teachers.

The true goal of the tax break is to fill union coffers by making dues less of a deterrent to joining. The incentive would be particularly strong in 23 states without right-to-work laws, where workers pay partial union fees whether or not they’re members. The Democratic tax break would let workers write off that cost by joining the union and deducting some of their dues. The catch is that, unlike nonmember fees, dues include money that goes for campaigns and lobbying.

Democrats collect the lion’s share of that union spending. OpenSecrets, a watchdog for political money, reports that Democrats claimed 90% of union donations in 2020 federal races. The tax break for dues would add more fuel to the political machine.

It’s also a step backward for the tax code, which Republicans helped to rationalize in 2017. The Tax Cuts and Jobs Act nearly doubled the standard deduction to replace a hodgepodge of tax breaks, including a previous “below the line” deduction for dues. Instead of returning cash to the average worker, Democrats want all workers to subsidize the unionized few—along with their own election campaigns.