New law would end unfair taxation on workers’ strike pay

September 29, 2025

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In mid-September, Senator Ruben Gallego of Arizona introduced the Tax Cut for Striking Workers Act. This legislation would make it so striking workers no longer get taxed on the small payments they receive from a union strike fund.

“The Tax Cut for Striking Workers Act is just common sense,” said SMART General President Michael Coleman. “No union member ever takes the decision to go on strike lightly — it’s the last resort. But when we need to go on strike, we have to be able to do so without being double taxed on the small amount of money we depend on to fight for what’s right.”

The ability to go on strike is one of the most powerful tools that union workers have to demand fair treatment at work. Striking is how union members can fight for fair pay, benefits, and safe working conditions. It ensures employers answer for breaking the law.

Going on strike is an extremely difficult decision to make, primarily because it means workers are giving up their regular paychecks in order to win what they deserve. In fact, many workers can only afford to strike because unions like SMART may provide small stipends to help cover lost wages in the form of a strike fund.

Right now, in a sign of how broken labor law is in the United States, the federal government taxes those small strike fund payments. That basically means striking workers get double taxed: They contribute their own federally taxed pay to the strike fund, and then they get taxed on the money from the strike fund as well.

That’s why SMART is supporting the Tax Cut for Striking Workers Act. The United States’ outdated labor law, combined with corporate America’s enormous power, gives bad-faith employers an enormous amount of leverage when it comes to work stoppages. This legislation is a small step towards leveling the playing field and giving working Americans more agency in the workplace.

“All of us at SMART thank Senator Gallego and the cosponsors of this bill, and we urge every pro-worker member of Congress to support its passage into law,” General President Coleman concluded.

The legislation is cosponsored by Senators Ron Wyden (D-OR), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Tammy Baldwin (D-WI), Chris Van Hollen (D-MD), and John Fetterman (D-PA).