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Bill would end tax benefits for union busting

Date: June 2, 2022

Published on June 1, 2022

By Colin Staub, Northwest Labor Press

A bill in Congress would end an unintentional tax benefit for corporations that try to stop their employees from unionizing.

Senator Bob Casey of Pennsylvania introduced S. 4192 on May 12 along with 20 cosponsors, including Oregon Senators Jeff Merkley and Ron Wyden and Washington Senator Patty Murray.

The “No Tax Breaks for Union Busting Act” modifies the U.S. Internal Revenue Code. That code currently says when companies spend money to influence legislation, politicians or elections, they don’t get to declare that spending as an ordinary business expense for the purpose of calculating the profit they pay taxes on. The bill adds another category of spending that’s not considered an ordinary business expense: “Any attempt to influence the taxpayer’s employees with respect to labor organizations or labor organization activities,” including influencing workers’ opinions on unions.

That means company spending on both lawful anti-union activity and illegal union busting would be denied any unintended tax benefit.

The bill, which hasn’t moved since it was introduced, also creates a new union busting disclosure requirement. Employers would have to report to the Internal Revenue Service each year, detailing when union busting took place and how much the employer spent on it.

The Economic Policy Institute says U.S. employers spend at least $340 million on union busting consultants each year.

“All of these union-busting activities can be written off as business expenses, so you’re getting a tax benefit for trampling on your workers’ rights,” Wyden said in a news release. “That shouldn’t happen.”

The bill comes on the heels of union efforts at Amazon, including the first successful union drive at an Amazon warehouse in Staten Island, New York. Amazon engaged in aggressive anti-union activity during the recent campaigns (prompting the National Labor Relations Board to order an entire second election at a Bessemer, Alabama, warehouse because of “flagrant” labor law violations by Amazon).

At the same time the company was fighting union efforts, it was reportedly collecting tax subsidies. In late April, the Amazon Labor Union wrote to New York Attorney General Letitia James, highlighting that Amazon had applied for and was receiving a state tax incentive (through the Excelsior Jobs Program) for creating jobs at the very New York warehouse where it was opposing union activity.

In describing the bill, anti-union law firm Ogletree Deakins said lawmakers “are turning to the tax code to benefit big labor” because they can’t pass the Protecting the Right to Organize Act (which contains far wider reaching protections for unionizing).

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