The sudden popularity of exempting tips from taxes is a reminder of the improvisational nature of economic policymaking under Donald Trump.
- Share full article
Donald Trump visiting a local sandwich shop in Philadelphia in June. Some Democrats are also warming to making tipped income tax-free.
In Donald J. Trump’s telling, the idea was born over dinner at his Las Vegas hotel, where the waitress serving his table complained about the burden of paying taxes on her tips.
“I was actually surprised to hear it,” Mr. Trump said last month at a rally in Virginia, adding that he quickly decided to address the waitress’s problem with a new campaign pledge: “No taxes on tips!”
The proposal has rapidly become more than just a rally talking point. The Republican Party has officially embraced it in its platform, and House Speaker Mike Johnson, Republican of Louisiana, has said he would “pass it as soon as we can.” Some Democrats are also warming to making tipped income tax-free, with the two senators representing Nevada, a swing state with large restaurant and casino industries, endorsing it.
The sudden popularity of exempting tips from taxes is a reminder of the improvisational nature of economic policymaking under Mr. Trump. Several economists involved in advising the Trump campaign said they hadn’t heard of the idea until Mr. Trump announced it publicly. But Republicans now see it as a key way to appeal to working-class Americans during the campaign against President Biden.
Mr. Trump has encouraged his supporters to leave a note on restaurant tabs telling service staff that a Trump victory in November means no taxes on tips. Roughly four million Americans work in jobs where tips are common, according to an estimate by the Budget Lab at Yale.
“It’s not like a gang of economists sitting around a table came up with that,” Stephen Moore, a Trump economic adviser, said. “I thought, ‘I don’t know if he’s being serious or not’, but as a political matter it’s a home run.”
We are having trouble retrieving the article content.
Please enable JavaScript in your browser settings.
Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.
Thank you for your patience while we verify access.
Already a subscriber? Log in.
Want all of The Times? Subscribe.
SKIP ADVERTISEMENT
Source: nytimes.com
