If your employment requires you to be a union member, it seems logical that you should be able to deduct your union dues from your income taxes, doesn’t it?
In unionized businesses, whether “open” or “closed” shops, employees pay such dues. For the 1.4 million Teamsters in the U.S. and Canada, for example, the going dues rate is 2.5% of the hourly wage. On the union’s website, the Teamsters figure that at a pay rate of $20 an hour, a member’s monthly dues would be $50, or $600 a year.
In the U.S., the average union member pays $400 per year in dues.
These dues, however, are no longer deductible for unionized employees. This is mandated by the Tax Cuts and Jobs Act of 2017, whose provisions will be in force through 2025. The supposed rationale for doing away with such deductions was the raising of the “standard deduction” for individuals to $12,400 per year and $24,800 for couples, so that it could cover many smaller expenses. Also done away with was the deductibility for employees of home office expenses, legal fees, licenses and regulatory fees, expenses incurred in the process of being an educator, etc.
But for me as a freelancer, the owner of a “sole proprietorship,” such union dues are still deductible on my Schedule C of the federal form. So are legal expenses connected with the business and so are part of my home expenses for areas used solely for my work, and so are the fees I pay for licenses to use images in my next book.
I pay union dues to the Writers Guild of America, as I have for over 50 years. It is a union made up of people who write for film, television and other visual media. Actually, you can’t really work as a writer in the visual media unless you are a member. No WGA card (or intent to get a card), and the “signatories” to the WGA contracts, which include almost all legit producers, cannot hire you. The more “covered” work I do in that field, the more I owe the WGA; and I even owe a minimum in dues if I’m not working in the field at any given moment. Such dues are a regular business expense for me, so I deduct them from my profit and loss sheet.
But isn’t a Teamster’s dues payment equally necessary for him or her, so they can continue to be employed in their field? Of course it is — which is why it was deductible for decades prior to 2017. Which means to me that making the union dues not deductible was a deliberate attempt to punish unions and union members. It was part of an administration-wide push to get rid of unions, which have traditionally (though not always) voted for the Democratic Party. By the way, in 2016 the Teamsters as a union endorsed Hillary Clinton, although many of its members voted for Donald Trump, whom Teamsters’ leader James Hoffa referred to as “no friend to working Americans.” One of Trump’s first unfriendly-to-working-Americans acts as president was to axe the deductibility of union dues.
There is a simple fix for this economic unfairness: Allow union members to deduct their dues payments on the first page of their tax returns, separately from the standard deduction.
Let’s do some figuring. About 140 million Americans file tax returns each year, and pay $1.4 trillion in individual federal taxes on their “adjusted gross incomes” of $10.2 trillion. Multiplying total U.S. union membership of 14 million people by the average dues of $400 per year yields $5.6 billion dollars. If taxes on union members’ incomes are being paid at the rate of 20% — close to the average net federal tax rate for workers earning $20 to $35 an hour, which is the range for most unionized workers — we’re talking about $1.1 billion in lost income to the federal government if it once again allows unionized employees to deduct their dues payments. “A billion here, a billion there, and pretty soon you’re talking big money,” said the late Senator Everett Dirksen in the early 1960s, regarding federal spending. And that was before the federal budget had added an extra zero or two. In other words, a billion is chump change.
That is to assert that if every unionized employee could deduct their dues payments from their “adjusted gross incomes,” the resulting loss in income to the federal government would be almost inconsequential to the government. But such a deduction would have important benefits for union members: It would restore a bit of buying power to unionized employees, and it would restore their dignity, by having their government officially consider their dues as legitimate a business expense for them as it is for us freelancers.
Tom Shachtman is the author of more than a dozen American and world histories and of documentaries seen on all the major networks. He lives in Salisbury.
