Tax Fairness for Workers Act
- Sponsor
- Rep. Boyle, Brendan F. [D-PA-2]
- Committees
- Ways and Means Committee (primary)
- Last action
- Apr 7, 2025
Bottom line
The bill aims to reduce the tax burden on employees by making union dues and unreimbursed work expenses deductible, thereby increasing their take-home pay or reducing their tax liability, effective for taxable years beginning after December 31, 2024.
What it actually does
This bill amends the Internal Revenue Code of 1986 to allow an above-the-line deduction for union dues and expenses, meaning these can be deducted from gross income regardless of whether a taxpayer itemizes. Additionally, it reinstates a miscellaneous itemized deduction for all other unreimbursed expenses incurred by an employee in their trade or business, removing the prior suspension and the 2-percent adjusted gross income (AGI) floor for these specific expenses.
Proponents argue
Proponents argue this bill restores fairness to the tax code for working families by recognizing legitimate business expenses incurred by employees and supporting union membership. They contend it rectifies a disparity created by previous tax law changes that disproportionately affected middle-class workers, ensuring that employees are not taxed on income spent to earn that income.
Opponents contend
Opponents might argue that these expanded deductions disproportionately benefit higher-income earners who are more likely to itemize or incur significant unreimbursed expenses, potentially exacerbating income inequality. They may also raise concerns about the potential impact on federal revenue due to reduced tax collections and the increased complexity for tax administration and compliance.
The bill is concise and can be read quickly, allowing ample time for understanding its core provisions and their implications.
Section 2(a), amending Section 62(a)(1) of the Internal Revenue Code of 1986
Above-the-Line Deduction for Union Dues and Expenses
This provision allows taxpayers to deduct union dues and expenses directly from their gross income, before calculating their adjusted gross income (AGI). This means the deduction is available to all taxpayers, regardless of whether they itemize deductions, and it is not subject to any percentage-of-AGI limitation, making it accessible to a broader range of workers.
Supporters argue
Supporters argue this provision directly benefits union workers by reducing their taxable income, making union membership more financially attractive and recognizing the legitimate costs associated with their employment. It levels the playing field with self-employed individuals who can deduct business expenses.
Critics contend
Critics might argue that this creates a specific carve-out in the tax code that could be seen as preferential treatment for union members over other employees or groups, potentially leading to calls for similar deductions for other professional expenses, further complicating the tax system.
Tradeoffs
This provision balances the goal of supporting union workers and recognizing their employment-related expenses against concerns about tax code complexity, potential revenue loss, and perceived preferential treatment for a specific group of taxpayers.
Section 2(b), amending Section 67(g) of the Internal Revenue Code of 1986
Reinstatement of Miscellaneous Itemized Deduction for Other Unreimbursed Employee Business Expenses
This provision reinstates the ability for employees to claim a miscellaneous itemized deduction for all other unreimbursed expenses incurred in their trade or business as an employee. Crucially, it removes the prior suspension of these deductions (enacted by the Tax Cuts and Jobs Act of 2017) and specifies that the 2-percent adjusted gross income (AGI) floor will only apply to other miscellaneous itemized deductions, not to employee business expenses. This means these expenses would be fully deductible for those who itemize.
Specifies that the amendments made by this Act will apply to taxable years beginning after December 31, 2024.
Section 2(c)
Why it matters:This is standard legislative practice to place effective dates at the conclusion of the relevant statutory changes, rather than being an attempt to obscure the provision.
Case for: Proponents would argue that this provides a clear and timely implementation schedule, allowing taxpayers and the IRS to adequately prepare for the changes and ensuring a smooth transition for the upcoming tax year.
Case against: No specific opposition is typically raised against standard effective date clauses, as they are necessary for the orderly implementation of new laws.
Estimated impact: This provision dictates the fiscal year from which the revenue impact of the new deductions will begin, making it a critical determinant of the bill's overall financial effect.