Axios reported that Vice President Kamala Harris proposed eliminating taxes on tips for service industry workers, an idea first put forward by her Republican rival, Donald Trump, in June.
Trump quickly accused Harris of being a "copycat" and appropriating his policy proposal. The former president took to his Truth Social platform to suggest Harris lacks imagination and is playing catch-up by adopting his stance on not taxing tips.
He questioned how long it would be before she copies another one of his policies and said she is "looking really bad now" as people wait to see what idea of his she will mirror next.
Harris’s proposal has garnered significant attention, particularly with the endorsement by Nevada's Culinary Union on the same day she made her pledge. Representing 60,000 hospitality workers, the union's support underscores the policy's alignment with labor interests. Trump’s interest in the topic originated in June after a Nevada waitress voiced frustrations over government taxation of her tips, an incident that resonated with many service employees.
The converging promises from Harris and Trump underscore the bipartisan appeal of this proposal. Despite their political differences, both appear dedicated to alleviating financial pressure on service workers. This uncommon political agreement has brought the issue to the forefront of national debate.
Republican Senator Ted Cruz has introduced legislation to exempt tips from federal income tax, receiving backing from Nevada's Democratic Senators Jacky Rosen and Catherine Cortez Masto. House Speaker Mike Johnson has also committed to passing this bill. Democratic Representative Ritchie Torres is among the lawmakers showing support, suggesting a growing consensus on the issue.
While the growing support for the proposal is noteworthy, critical details remain unclear. Neither Harris nor Trump have specified whether their respective proposals would eliminate income taxes only or both income and payroll taxes on tips. This ambiguity leaves questions about the plan’s full impact and feasibility.
The lack of specifics has made it difficult to ascertain the number of workers who would benefit if the policy were implemented. However, according to 2022 data, there were about 2.19 million waiters and waitresses in the U.S., the majority of whom do not pay federal income taxes due to low earnings.
Some political observers rank the elimination of tax on tips as a pivotal issue for the upcoming elections. With both Republican and Democratic support, this proposal might alter the financial landscape for millions of Americans in the service industry.
Rep. Ritchie Torres’s quip, "Even a broken clock is right twice a day," illustrates the rare occasion where political adversaries find agreement. Yet, the adoption of Trump’s proposal into the Republican Party's 2024 platform hints at a larger strategic play. Trump has actively claimed ownership of the idea, accusing Harris of leveraging it for political gain by asserting, "This was a TRUMP idea - She has no ideas, she can only steal from me."
Harris, anticipating the long-term impacts, stated:
It is my promise to everyone here when I am president we will continue to fight for working families, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.
The conversation surrounding this policy continues to evolve, driven by both political and public interest. With bipartisan support and legislation in the pipeline, the discourse over the future of tip taxation remains fervent.
In summary, the push to eliminate taxes on tips marks a rare bipartisan agreement in a politically polarized landscape. The support from significant figures like Vice President Kamala Harris and former President Donald Trump, along with notable legislative action, indicates that change may be on the horizon for service and hospitality workers.
