Former President Trump announced on Sunday that he would eliminate taxes on tips as his first action if reelected, aiming to appeal to service industry workers. At a Las Vegas rally, Trump stated, “When I get to office, we are going to not charge taxes on tips… we’re going to do that right away.” This move would require congressional approval, especially as lawmakers revisit tax policies next year with the expiration of Trump’s 2017 Tax Cuts and Jobs Act (TCJA).
Currently, service workers must report tips to the IRS as taxable income. Trump’s 2017 tax cuts did not address tips, but a Republican-led government could potentially extend and expand these policies. Trump contrasted his stance with President Biden’s, claiming Biden aims to increase taxes on tips and hire more IRS agents to enforce this.
Biden’s tax proposals include higher taxes on wealthy individuals and corporations and raising the federal minimum wage, including phasing out the tipped minimum wage. The Culinary Workers Union Local 226 in Las Vegas criticized Trump’s promise, with Secretary Treasurer Ted Pappageorge saying, “Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon.”
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