Julie Su, President Biden’s nominee for Secretary of Labor, could raise taxes on tens of millions of Americans if her radical agenda is allowed to be pursued.
Su, who has been Biden’s Deputy Secretary of Labor since winning a thin party-line confirmation vote in 2021, is currently the Acting Secretary of Labor following the departure of Secretary Marty Walsh. Prior to her appointment to the U.S. Department of Labor, Su was the head of California’s Labor and Workforce Development Agency, where she oversaw a troubling pattern of widespread failures.
One of these failures was the infamous Assembly Bill 5 (AB 5), a law pioneered by Julie Su to forcibly reclassify Californian workers from independent contractor status to W-2 employment status. Nine-in-ten freelancers in California opposed the law, and voters in the state eventually passed a ballot referendum by a 17-point margin to impose sweeping exceptions for app-based rideshare and delivery drivers due to the unworkable nature of the law.
At the core of Su’s AB 5 law was the implementation of a vague, three-factor test known as an “ABC test” to determine employment classifications. Last year, Americans for Tax Reform and the Tholos Foundation commissioned a study analyzing the potential effects of implementing an ABC test on a nationwide basis.
According to the study, millions of Americans could end up paying higher taxes if Su were allowed to take her radical reclassification plan national.
Using the most up-to-date government statistics at the time of the study, 56 percent of the independent contractors who are most likely to be reclassified under a national ABC test, or about 7.7 million workers, would pay higher taxes under their new employment status. Of these workers facing higher tax bills, 96 percent also earn less than $400,000 per year, meaning approximately 7.5 million Americans earning below that amount would see their taxes raised. This would be yet another violation of President Biden’s pledge to not raise taxes on any American making less than $400,000.
Worse yet, the study indicates that more recent data on the gig economy could mean tens of millions of Americans would pay higher taxes. For example, extrapolating the results of the study to other national freelancing data collected by Freelance Forward would mean that as many as 33 million Americans could face higher tax burdens as a result of ABC test reclassifications.
President Biden and Senate Democrats already tried to impose an ABC test on Americans through the so-called “Protecting the Right to Organize” (PRO) Act. When the legislation failed to gain enough support in Congress, the Biden administration has sought to forcibly reclassify Americans through executive fiat instead.
To protect workers and taxpayers, the Senate must reject Julie Su’s nomination for U.S. Secretary of Labor.