Trump is proposing to make tips tax-free. What would that mean for workers?
Former President Donald Trump’s proposal to exclude tips from federal taxes is getting strong reviews from some Republican lawmakers
WASHINGTON — Former President Donald Trump's new proposal to exclude tips from federal taxes is getting strong reviews from some Republican lawmakers, though major questions remain about the impact of the policy and how it would work.
What's certain is that a change in the taxation of tips would affect millions. The U.S. Bureau of Labor Statistics estimates there are 2.24 million waiters and waitresses across the country, with tips making up a large percentage of their income.
A look at what Trump's proposing and the possible political and economic ramifications:
Trump announced his tax-free-tips plan at a June 9 rally in Nevada, a key battleground state with six electoral votes in the race for the White House. President Joe Biden won the state in 2020, but the Trump campaign hopes to put the state in play this fall.
Nevada has the highest concentration of tipped workers in the country, with about 25.8 waiters and waitresses per 1,000 jobs, followed by Hawaii and Florida.
“To those hotel workers and people who get tips, you are going to be very happy, because when I get to office we are going to not charge taxes on tips, people making tips,” Trump said at the rally. “… We’re going to do that right away, first thing in office.”
The pitch sets up a sharp political contrast between Democrats and Republicans. While Trump assumes that a tax cut would help workers, Democrats have generally endorsed efforts to increase hourly wages — and it’s an open question which approach resonates more with voters.
The Culinary Union, which represents 60,000 workers in Las Vegas and Reno and is backing
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