Tax Cut for Striking Workers Act of 2025
Summary
The "Tax Cut for Striking Workers Act of 2025" aims to amend the Internal Revenue Code of 1986 by excluding strike benefits from gross income. This means that compensation received by workers during a strike, lockout, or work stoppage would not be subject to federal income tax. The bill also includes provisions to ensure that these strike benefits are not considered as part of the Earned Income Tax Credit calculation.
Expected Effects
If enacted, this bill would reduce the tax burden on workers participating in strikes, lockouts, or work stoppages. This could provide financial relief during periods of lost wages. The change would apply to compensation received after December 31, 2025.
Potential Benefits
- Provides financial relief to striking workers by exempting strike benefits from federal income tax.
- Potentially strengthens the bargaining power of labor unions by reducing the financial strain on striking workers.
- Could encourage more workers to participate in strikes to advocate for better wages, benefits, or working conditions.
- Simplifies tax filing for striking workers by eliminating the need to report strike benefits as income.
- May indirectly stimulate local economies as striking workers have more disposable income during labor disputes.
Potential Disadvantages
- Reduces federal tax revenue, potentially increasing the budget deficit or requiring cuts in other government programs.
- Could be perceived as unfair by taxpayers who do not receive similar tax breaks.
- May incentivize longer or more frequent strikes, potentially disrupting economic activity.
- Could create administrative complexities for the IRS in defining and tracking qualified strike benefits.
- Might disproportionately benefit workers in certain industries or regions with higher rates of unionization and strike activity.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it aims to support workers during labor disputes. Additionally, it indirectly relates to the First Amendment's guarantee of the right to assemble and petition the government, as strikes are a form of collective action to address grievances. However, the Constitution does not explicitly address taxation of strike benefits, leaving Congress broad authority under Article I, Section 8 to establish and modify tax laws.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).