Trump proposes eliminating the tip tax
3 mins read

Trump proposes eliminating the tip tax

Former President Trump said Sunday that he would eliminate tip taxes as the “first thing” he would do in office if re-elected, his latest move to appeal to service industry voters.

“As for hotel workers and tipped people, you will be very happy. Because when I get into office, we’re not going to collect taxes on tips,” Trump said at a rally in Las Vegas.

“We will not do it and we will do it immediately, first of all in office, because it has been a point of contention for years,” he added. “You do great service, you take care of people, and I think this will be something we really deserve.”

Changes to the taxation of tip income would require congressional approval. Lawmakers will take a closer look at national tax policy next year after the expiration of Trump’s 2017 Tax Cuts and Job Cuts Act (TCJA), which lowered the corporate tax rate and lowered individual tax rates depending on the tax credit.

Under current law, service workers are required to report their tips to the IRS, which treats them as ordinary taxable income.

Trump’s 2017 tax cuts did not include provisions on tipping, but if Republicans regain the White House and Senate and hold the House, they will have the opportunity to supplement and expand Trump’s previous policies.

Trump, v later post in the Truth Social case, he attacked President Biden in an attempt to oppose the incumbent’s tax policies.

“Scammer Joe Biden has taken the complete opposite approach, trying to tax more and more of his tips by hiring up to 88,000 IRS agents!” Trump wrote.

“I hope that rank-and-file union members, union leadership itself, and workers across the country, both union and non-union, will support Donald J. Trump because I am PRO-NO TALK AND ALL ACTION! TRUMP WILL KEEP HIS OBJECTIVES AND STAND WITH OUR GREAT WORKERS. PROMISES MADE, PROMISES KEPT!” he added.

Biden called for a series of tax increases on wealthy individuals and large businesses, releasing a proposal in March to impose a wealth tax on individuals worth more than $100 million. He also proposed raising the corporate tax rate closer to pre-Trump levels.

Biden also pushed for an increase in the federal minimum wage and phasing out the tipped minimum wage for restaurant workers.

In 2021, the Biden administration’s Department of Labor reversed a Trump-era policy by issuing a final rule limiting when employers can pay workers a lower minimum wage with tips for performing non-tipped jobs, according to Reuters.

The Hill requested further comment on the Trump campaign.

The Las Vegas-based Culinary Workers Union Local 226 criticized Trump’s promise on Sunday.

“Help is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and the crazy campaign promises of convicted felons,” Culinary Association Secretary-Treasurer Ted Pappageorge said in a statement.

—Updated at 12:33 p.m

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