A promise to eliminate taxes on tips, championed by Donald Trump and supported by Kamala Harris, aims to alleviate financial strain on tipped workers. However, the practicality and impact of such a policy remain unclear. While lauded by some, critics argue it would benefit a limited group and raise concerns about Social Security and Medicare.
Cindy Kramer, 38, works well over 60 hours a week juggling four different jobs in Staten Island, New York, to support her child and make ends meet. Two of those jobs are bartending. Like many in the service industry, Kramer is in favor of President-elect Donald Trump ’s campaign promise to eliminate tax on tips, one that Vice President Kamala Harris also endorsed with certain guardrails and which has already seen movement in Congress.
The proposal could also be relatively inexpensive compared to Trump’s broader tax plans. While extending the 2017 tax cuts would be about $4 trillion, in comparison, the Budget Lab at Yale University estimates no tax on tips could cost anywhere from $60 billion to $200 billion over 10 years. Thorny issues While not every tipped worker meets the threshold for owing income taxes, every worker in America pays payroll tax on their first dollar of income.
Economics Tipped Workers Tax Policy Donald Trump Social Security Minimum Wage
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