What’s all the fuss about tips and taxes?
By Anna Helhoski | NerdWallet
When electioneering, the best pledges are catchy enough to get stuck in a voter’s head. During this election, “no tax on tips” seems to be the phrase fitting that bill.
Both presidential candidates are embracing the promise to exempt workers from paying taxes on their tips. But the problem with no-tax-on-tips proposals, experts say, is that they’re clearly a bid for votes rather than a substantive solution to address the fundamental needs of tipped workers.
“This wouldn’t help very many workers, and it could actually be very harmful to millions more, with the real benefits of this policy change going to employers and the wealthy at the expense of working people,” says David Cooper, researcher from EPI Action, a nonpartisan research and advocacy organization.
How a no-tax-on-tips promise entered the election
On June 9, former President Donald Trump made a promise to end taxes on tips in front of service workers in Las Vegas. Last weekend, in Las Vegas, Vice President Kamala Harris made a similar pledge. It’s no coincidence that both candidates made the announcement in Las Vegas — leisure and hospitality is the dominant industry in the metro area, Bureau of Labor Statistics data shows.