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Biden's Build Back Better Bill Could Make Union Lobbying Tax Deductible

One of the longstanding rules for non-profit charitable and educational organizations is they cannot engage in lobbying. But a provision in the Democrats’ Build Back Better bill allowing union members an above-the-line deduction for up to $250 of their union dues could undermine that principle.
Here’s how the Internal Revenue Service describes the tax treatment of lobbying:
In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). …

Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office) …. 

An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. …

Individuals who itemize may deduct money donated to 501(c)(3) organizations—including the Institute for Policy Innovation!—from their income taxes. And Congress wanted to encourage such charitable activity by providing that deduction.
But Congress did not want taxpayers subsidizing political activity. So 501(c)(3)s may engage in education, such as explaining the positive or negative impacts of proposed legislation such as the BBB, but they can’t encourage the public to support or oppose it.
To be sure, some 501(c)(3)s have pushed the limit and occasionally cross the line. And sometimes the IRS will call them to account. But the principle is no tax deductions for lobbying.
The problem with the BBB’s $250 union dues deduction is that many unions are aggressively political, not just supporting or opposing but often sponsoring legislation that helps them and mostly Democratic elected officials.
According to Open Secrets, a nonpartisan group that tracks money in politics, labor unions have spent $35.4 million lobbying in 2021. No doubt a bunch of that money was targeted toward passing both President Joe Biden’s infrastructure bill and the BBB.
As Open Secrets notes: “[T]he money that industries, companies, unions and issue groups spend on lobbying is often just a drop in the bucket compared to what they can reap in return if their lobbyists are successful.” (emphasis added)
Unions should be allowed to lobby all they want—they’re going to anyway. But if they are going to lobby, especially for legislation that specifically benefits them or their supported political candidates, no part of their dues should be deductible.