SHUTDOWN Act Imposes New Daily Tax on Congress Members During Government Lapses, Starting 2025

The aptly named SHUTDOWN Act (Stop Holding Up Taxpayers, Deny wages On Washingtons Negligence Act) cuts straight to the chase: it makes government shutdowns financially painful for the people who cause them—Members of Congress. This bill introduces a brand-new federal tax specifically targeting every Senator, Representative, Delegate, and the Resident Commissioner from Puerto Rico whenever there is a lapse in federal funding, starting with the 2025 tax year.

The Daily Penalty for Inaction

Think of this as a direct financial accountability measure. If Congress fails to pass the necessary budget bills or continuing resolutions, and the government shuts down, every serving Member gets hit with a daily tax for the duration of that lapse (SEC. 2). This isn't a flat fee; it’s proportional to their salary. The tax amount is calculated based on the percentage of the tax year they served while the government was shut down. For instance, if a Member served 30 days during a shutdown in a tax year, their tax would be based on 30 days of their annual salary for that year. The mechanism is simple: the longer the shutdown, the bigger the tax bill.

Why This Matters to Everyone Else

For most people, a government shutdown means delays in services, unpaid federal workers, and general uncertainty. This bill aims to change the incentives for the lawmakers themselves. Currently, many Members of Congress continue to receive their paychecks during a shutdown, which can make the political brinkmanship feel low-stakes for them personally. By introducing a direct financial penalty, the SHUTDOWN Act essentially makes the cost of legislative failure personal and proportional. The intent is to make Congress work harder and faster to avoid a shutdown, which, in turn, keeps federal services running smoothly for the rest of us.

The Fine Print on Paychecks

This new provision is being written directly into the Internal Revenue Code (Subchapter A of chapter 1), meaning it’s a genuine federal tax, not just a temporary salary hold. This detail is important because it establishes a permanent mechanism for penalizing legislative failure. The calculation method requires precise tracking of service days during a lapse, which could present some administrative complexity for the IRS, but the language is clear on the intent: if you were serving during a shutdown, you are paying a tax on that service. This change is set to kick in for tax years beginning after December 31, 2024, giving lawmakers plenty of time to get their funding acts together before the new rules apply.