Why are Unions Tax Exempt? The Businesses they Seek to Unionize are Not!

I know this is a rhetorical question but why are Labor Unions tax exempt?  They do have to pay taxes on direct political contributions but that is after the fact and only on the dollars they use for political contributions.  They can use tax exempt money for lobbying and other power-brokering activities and that is a real thin line between a political and non-political contribution or expenditure…

The businesses the Union seek to unionize have to pay corporate taxes.  Obviously government agencies who are unionized do not pay taxes but their employees have to pay union dues.  Since everyone else drags out the 14th Amendment to support their cause why not apply the “Equal Protection” tenets of the 14th Amendment to eliminate this LOOPHOLE? 

Section 1 reads:

“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”  (emphasis mine)

(Various court cases have interpreted this Amendment to also include the Federal Government even

though the original text specifically called out “State”, and it is capitalized)

Bottom Line:

So, you have a business that operates under a union contract, and who pays federal and state income taxes; and you have the representing union, collecting dues from the business’s employees; why aren’t both the business and the Union subject to federal and state taxes?  Answer, the Democrat Party protects the unions and themselves by “sheltering” as much of the union’s income as possible, LOOPHOLE, from federal and state income taxes.  Is this fair, or equal?  I think not!

Public Sector Unions:  This is especially egregious in the case of Public Sector Unions.  The union has the federal, state or local agency collect the dues for them; then they turn around and support Democrat candidates.  Sweet!  Why do you think that only 6% of the infamous Obama Stimulus fiasco went to build roads and other infrastructures?  Because much of the 94% went to states and counties to keep from terminating public sector employees and thus reducing the Union’s dues revenue; and the rest went for grants for special projects that when to organizations, including unions, who kicked back much of the funding they received to the Democrat party.  Nice work if you can get it.

In order to level the playing field just a little, UNIONS SHOULD ALSO PAY THEIR FAIR SHARE OF TAXES LIKE THE RICH THEY LOVE TO ATTACK!  There is no logical reason why they are tax exempt.  They are truly a business and should not be able to have a 20-25% subsidy just because they support Democrat candidates.  There is an argument to be made, and it was by Franklin D. Roosevelt, that public sector employees should not be unionized.  It sets up a conflict of interest between the real employer, the taxpayers, the government agency as the agent employer and the union employees.  FDR said it best himself:


“… Meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the government. All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations … The very nature and purposes of Government make it impossible for … officials … to bind the employer … The employer is the whole people, who speak by means of laws enacted by their representatives …

“Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of government employees. Upon employees in the federal service rests the obligation to serve the whole people … This obligation is paramount … A strike of public employees manifests nothing less than an intent … to prevent or obstruct … Government … Such action, looking toward the paralysis of Government … is unthinkable and intolerable.” (emphasis mine)

Franklin D. Roosevelt, 1937


Well, if you attend a town hall with your Congressman or Senator, you might want to ask them where they stand on this.  Washington is really brave when it comes to attacking business, you can watch you representative squirm when you pose this question to them…

RD Pierini




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6 thoughts on “Why are Unions Tax Exempt? The Businesses they Seek to Unionize are Not!

  1. In response to the first poster. “Unions and corporations are not people.” Apparently the Supreme Court disagrees with you.

  2. “nor deny to any person within its jurisdiction the equal protection of the laws.”
    unions, and corporations are not people.

    • But…I was a sole proprieter and was unionized by the UFW…
      Also, court cases have established “Corporate Personage” that is the legal concept that a corporation may sue and be sued in court in the same way as natural persons or unincorporated associations of persons. This doctrine in turn forms the basis for legal recognition that corporations, as groups of people, may hold and exercise certain rights under the common law and the U.S. Constitution. The doctrine does not hold that corporations are “people” in the most common usage of the word, nor does it grant to corporations all of the rights of citizens. As early as 1886, the Chief Justice of the US Supreme Court stated in Santa Clara County v. Southern Pacific Railroad that: “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.”

  3. this is a very complicated look at a simple situation . a union operates, including paying some people to do work to represent the will of all (y’know, local participatory representative government) … to protect everyone in the group . corporations do no such thing . they work quite openly for one thing, or maybe two .

    one thing : profit . unfortunately likely at the expense of many workers, all the water and air

    possibly two : to make some lasting (however negative) impression on the planet and all inhabitants (in the form of toxic concoctions, denuded hillsides, and topless mountains)

    i guess i have to add three : power to continue the destruction and call it ‘legal’ which designation they have purchased by sharing profit with those who make laws ; which also they have terribly mixed up with ‘good’ . also they have ‘wealthy’ mixed up with ‘good’ . ‘powerful’ … it’d be funny if it weren’t so sad

    a functional successful union is formed by workers, with pay on which they already paid taxes, to choose from among ourselves specific individuals who show talent in the constant struggle to gain and maintain, then regain a very clear operational definition of ‘status quo’ . this definition includes very specific detailed language providing that workers will be protected from harm by those needing their labor.

    this is something so many corporate bosses manage to forget on a daily basis : they need a labor force . there are so many more of us than there are of them

    the real question might be ‘how is it that a grown mentally healthy adult human does not realize the simple difference between a ‘for profit’ and a ‘for the people’ operation? tax breaks are supposed to be a direct reimbursement or forgiveness of proscribed debt to the community because the debt has been paid in other ways or through more direct channels than government management .

    another real question might be ‘why are churches and other religious organizations (which are inherently and actively political and also operate for profit in the form of vast holdings in real estate and other objects) exempt from paying taxes?

    power brokering

    there cannot be profit in governing . we already learned this . obsession with profit is a destructive force to the psyche . a disturbed psyche cannot be handed power over others

    i can’t believe you invoked ‘level the playing field’

    • I am aproving this post as it is a perfect Progressive view of the private sector and public sector unions. PSUs and the dues they collect are merely a method for the Progressives to launder campaign funds for Progressive candidates and state level initiatives. As a California resident, I see the PSU’s influence in every State wide election. Even the Progressive icon FDR opposed PSUs as he recognized the inherent confilict of interest between the PSU’s and politicians.


      Save R Nation

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