Trump floats plan to end taxes on tips, though experts raise doubts
Source: Nebraska Examiner
By: Ashley Murray - June 10, 2024 6:13 pm
WASHINGTON Economists across the ideological spectrum raised doubts about the cost and workability of former President Donald Trumps proposal over the weekend to exempt tips from federal taxes if he wins in November.
During a campaign rally Sunday in Las Vegas, where hundreds of thousands work in the hospitality industry, Trump promised service workers that they would no longer have to pay federal taxes on tipped income if the presumptive Republican nominee wins a second term.
The roughly 6 million tipped workers in the United States, as of the latest data available from 2018, make up a small fraction of the countrys 150 million taxpayers, but campaigning on tax cuts for certain demographics is increasingly a top issue leading up to Novembers presidential election.
This is the first time Ive said this, and for those who work at hotels and people that get tips, youre gonna be very happy because when I get to office we are going to not charge taxes on tips, on people making tips, Trump said to cheers at the rally.
Read more: https://nebraskaexaminer.com/2024/06/10/trump-floats-plan-to-end-taxes-on-tips-though-experts-raise-doubts/
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mpcamb
(2,927 posts)He still wouldn't exempt tip wages- he needs low earners to pay taxes for rich 1%ers.
jimfields33
(17,886 posts)Its a headache and not worthwhile for the workers who live on tips. Tax the two bucks an hour, but not the tips. Theyd get most of the two dollar an hour tax back as a refund.
bucolic_frolic
(45,600 posts)thesquanderer
(12,231 posts)The current issue is that so many people already do not pay tax on some or all of their tips. So the idea of making that no longer criminal (tax evasion) is not inherently insane or unworkable.
from https://www.forbes.com/sites/kellyphillipserb/2023/03/05/americans-are-tipping-more-and-more-often-the-irs-wants-its-cut/
...
Over the last three decades, the IRS has launched a series of programs that encourage employers to voluntarily calculate, report and collect taxes on a certain level of tips in exchange for protection from tip audits for themselves and their tipped employees. Except thats not working great either. A 2018 study by the Treasury Inspector General for Tax Administration estimated that 30% of employers with tip agreements in place were underreporting.
The recent move toward customers more often paying tips electronically (through an on-screen tap) should improve compliance, as it makes tips easily trackable. But it would be easy enough for the IRS to say that that income is not taxable.
I don't think this is inherently a bad idea. Rich people get all kinds of tax breaks. People who rely largely on tips don't, and they need it more.
SunSeeker
(53,001 posts)And strengthen the Earned Income Tax Credit for low-paid workers. That way it is fair to all lower income workers, not just those who work for tips. That is basically what Biden is trying to do with his tax plan. https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/11/fact-sheet-the-presidents-budget-cuts-taxes-for-working-families-and-makes-big-corporations-and-the-wealthy-pay-their-fair-share/
thesquanderer
(12,231 posts)...I was just saying the idea is not inherently "Insane and unworkable" (as it was called in the post I was replying to).
EYESORE 9001
(27,130 posts)All tips.
I was walking down the street, when these two guys approached and asked if Id like to run their company - pro bono. I gave it a whirl and they seemed to like my work. They liked it so much, they gave me a tip. Fat stacks of cash. I came back the next day
SunSeeker
(53,001 posts)Even if he could pass such an unworkable and unfair law (unfair to all the taxed workers who don't work for tips), he will take away their ACA healthcare, abortion rights, education funding, Social Security, democracy and their freedom. Not much of a deal.
Aussie105
(5,940 posts)But they do try to pay their workers a living wage.
Tipping is seen as a social faux pas in some countries, and as an insult in others.
jimfields33
(17,886 posts)California is paying 20 bucks an hour for hospitality workers. Most areas are almost if not more to 15 bucks an hour. It helps that workers are refusing to go to places to work that dont pay well. But I still dont think tips should be taxed.
twodogsbarking
(11,502 posts)The entire tax code needs revised.
lark
(23,745 posts)Anything he says that he's going to do for workers never ever happens, only the things hes doing for the rich actually becomes law.
If his mouth is moving, he's lying.
Mr. Mustard 2023
(206 posts)....wait for it - The Republicons.
twodogsbarking
(11,502 posts)sakabatou
(42,694 posts)KS Toronado
(18,595 posts)![](/emoticons/sarcasm.gif)
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sinkingfeeling
(52,458 posts)IronLionZion
(46,572 posts)![](/emoticons/eyes.gif)
kimbutgar
(22,366 posts)All he does is lie!
LiberalFighter
(53,036 posts)TexasBushwhacker
(20,586 posts)It ends up biting them in the ass when they're eligible for Social Security because their reported income is so low.
Mark.b2
(331 posts)The Grand Illuminist
(1,598 posts)I guess those who support this don't want better roads, improved infrastructure and education.
tinymontgomery
(2,608 posts)Tips were tax free till 82'.
Taxing tips began back in 1982 after Congress enacted the Tax Equity and Fiscal Responsibility Act (TEFRA) as a means of generating revenue through a series
Aug 30, 2018
https://www.touchbistro.com