In nowadays society, labor unions act as a tool to pass on information on behalf of workers. This paper is based on Kessing and Konrad's model (2006). We used the game theory's sequential equilibrium (SE) method to discuss what kind of taxing or subsiding policy will be selected when a government faces workers's decision to join labor unions. Besides, we try to loosen the restriction of balanced budget and found a better budget policy which is really beneficial for government.