S.1286 - Tax Fairness for Workers Act (119th Congress)
Summary
The Tax Fairness for Workers Act (S.1286) aims to amend the Internal Revenue Code of 1986. It seeks to allow workers an above-the-line deduction for union dues and expenses. Additionally, it proposes allowing a miscellaneous itemized deduction for unreimbursed employee business expenses.
The bill introduces changes to Section 62(a)(1) and Section 67(g) of the Internal Revenue Code. These amendments would effectively permit workers to deduct union dues and certain unreimbursed business expenses from their taxable income.
The bill, if enacted, would apply to taxable years beginning after December 31, 2024.
Expected Effects
The primary effect of this bill would be to reduce the taxable income for workers who pay union dues or incur unreimbursed business expenses. This could lead to a lower overall tax burden for affected individuals.
This could incentivize union membership and provide financial relief to employees who bear work-related costs. The change in tax deductions could also affect government revenue.
Potential Benefits
- Reduced Tax Burden: Workers who are union members or incur unreimbursed business expenses would likely see a reduction in their taxable income, leading to lower taxes.
- Incentivizes Union Membership: Allowing a deduction for union dues could encourage more workers to join unions.
- Financial Relief: The bill provides financial relief to employees who pay for work-related expenses out-of-pocket.
- Simpler Tax Filing: The above-the-line deduction for union dues simplifies the tax filing process for eligible workers.
- Increased Disposable Income: Lower taxes could translate to increased disposable income for workers, potentially boosting consumer spending.
Potential Disadvantages
- Potential Revenue Loss: The government could experience a decrease in tax revenue due to the increased deductions.
- Complexity: While aiming for simplicity, the changes to the tax code could introduce new complexities for some taxpayers.
- Limited Scope: The benefits are primarily targeted at union members and those with unreimbursed business expenses, potentially excluding other workers.
- Administrative Burden: The IRS may face an increased administrative burden in processing and verifying these new deductions.
- Potential for Abuse: There is a potential for taxpayers to improperly claim deductions for expenses that do not qualify.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution's preamble, which aims to 'promote the general Welfare.' By providing tax relief to workers, the bill seeks to improve their financial well-being.
Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States. This bill falls under Congress's power to modify the tax code.
However, the Constitution does not explicitly address the specifics of tax deductions for union dues or employee expenses. Therefore, the constitutional alignment is based on the broader interpretation of Congress's power to tax and spend for the general welfare.
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).