For all intents and purposes, Republican presidential candidate Donald Trump's “No Tipping Tax” initiative is a winner in every way.
The former president has pledged to keep tips from being taxable if he wins a second term in the White House in November, and a Newsweek poll commissioned by Redfield & Wilton Strategies found that 67 percent of Americans doesn't think tips should be taxed. . As the outlet noted, current law requires all cash and non-cash tips received by an employee to be treated as income, subject to income and payroll taxes.
Interestingly, Gen Z respondents were the least likely to support the proposal, but 59 percent were still on board. According to Newsweek, millennials and Gen Xers were more likely to favor abolishing tipping taxes at 70 percent and 74 percent, respectively.
Even in today's highly polarized political climate, there was widespread bipartisan support, with 68 percent of Republicans on board, compared to 65 percent of Democrats.
Trump promised to address the problem in June while speaking at a rally in Nevada — the state has the highest concentration of service workers in the country.
Trump: “When I'm in office, we won't tax tips.” This is HUGE for Americans in the service industry.
— Dinesh D'Souza (@DineshDSouza) June 10, 2024
“For the hotel workers and the tipped people, you're going to be very happy, because when I get into office we're not going to tax the tips, the tipped people,” Trump said. “Let's do it right away, first thing in office.”
Sen. Ron Johnson (R-WI) called the proposal a “very smart idea,” according to the Associated Press.
“I think it's actually a very smart idea. The men and women who are self-employed, they're coming back,” Johnson said. “That's very good, targeted tax reform right there.”
Newsweek cited a June report from the nonpartisan Committee for a Responsible Federal Budget that estimated Trump's plans would reduce federal revenue by $150 billion to $250 billion over 10 years “and could reduce revenue significantly more once incorporate behavioral effects”.
“Although the Trump campaign has not outlined its proposal in detail, we assume that tip income is exempt from federal income and payroll taxes,” the report said. “On a static basis, we estimate that this would reduce revenue by $150 billion to $250 billion between fiscal year (FY) 2026 and FY 2035, depending on how fast tipped revenue grows and on what distribution of income is concentrated”.
Trump offered another popular idea Wednesday during a rally in Harrisburg, Pennsylvania, when he said, “Seniors shouldn't have to pay Social Security taxes!”
No tax on tips!
No Social Security tax! pic.twitter.com/8tF199EA1L
— Genevieve (@GenevieveBayer) August 2, 2024
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