Rallying Las Vegas voters on June 9, former President Donald Trump said, “For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips.”
Amid 100-degree temperatures, he added, “You do a great job of service. You take care of people, and I think it’s going to be something that really is deserved.”
Trump’s tip-tax repeal proposal blends sensible policy and smart politics.
The presumptive GOP standard-bearer discussed this idea with congressional Republicans on Capitol Hill on Thursday.
“He would like to tell you that it was incredible research and policy discussion, but the secret is, he got it from a waitress,” Sen. Kevin Cramer, R-N.D., told Roll Call after huddling with Trump over a Republican legislative agenda. Cramer said that Trump got this idea when a Las Vegas waitress told him: “They are coming after my tips.”
“No tax on tips, OK?” Trump told supporters Friday in Palm Beach, Florida, on his 78th birthday. “We need to spread the word so that every time you leave a tip for the next five months, you put on the receipt, ‘Vote for Trump, because there’s no tax on tips.’”
The Tax Foundation analyzed the latest IRS data: In 2018, some 6.13 million workers paid federal income tax on an average of $6,249 in tips. Keeping that cash, rather than having it incinerated in Washington, would ease the pain of everyday Americans who endure President Joe Biden’s lingering inflation and dwindling economic growth.
“In an act of political genius, President Trump promised to eliminate income taxes on tips,” Grover Norquist, founder of Americans for Tax Reform, told me. “The promise was made in Nevada, one of many states where thousands of waiters and waitresses see tips as immediate rewards for their hard work and extra effort. Every tip is a pay hike.”
“Democrats like taxing tips,” Norquist added. “Why? The union bosses want to kill tips so they can treat waiters like assembly-line workers. They wish to prevent harder-working waiters from earning more.”
As if on cue, Ted Pappageorge, the boss of Las Vegas-based Culinary Workers Union Local 226, greeted Trump’s idea with a grimace.
Pappageorge said: “Relief is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon.”
Despite this corruptly earned Democratic talking point, the Left cannot argue that Trump is scrapping the tip tax to enrich his fellow billionaires at Mar-a-Lago. Instead, Trump would help barbers, baristas, and bartenders—people like those he recently visited at an Atlanta Chick-fil-A, a Harlem bodega, and a South Bronx park.
This working-class tax repeal will ease efforts to make permanent the Trump-GOP’s 2017 Tax Cuts and Jobs Act. Killing the tip tax is the side order of onion rings that makes the permanent tax-cut burger irresistible.
“Crooked Joe Biden has taken the totally opposite approach, trying to TAX more and more of their Tips, even hiring 88,000 IRS Agents to collect!” Trump wrote via Truth Social.
“In fact, Crooked Joe substantially increased the Reporting Requirements for Workers (2023!), and would go still further if I wasn’t here to watch.”
Indeed, ditching the tip tax would spare employees and employers endless paperwork hassles and needless scrutiny from Biden’s brigades of intrusive tax inspectors.
“The IRS wants to look at how they can trap the entire transaction process more accurately, thereby netting more revenue,” said National Taxpayers Union President Pete Sepp.
“It could also impose a whole new web of recordkeeping systems and compliance burdens,” Sepp told me. “The IRS has always tried to look over the shoulders of anyone who works in or runs businesses that either deal in a lot of cash or deal in a lot of tips.”
Compare Trump’s valuable tax cuts for workers with the Democrats’ venomous minimum-wage mandates. Last April 1, California imposed a 25% hourly pay hike on fast-food chains with at least 60 outlets, from $16 to $20.
As conservatives warned, results have been poisonous:
- Rubio’s Coastal Grill padlocked 48 Mexican restaurants in the Golden State and filed for bankruptcy due to “significant increases to the minimum wage in California.”
- Franchisees sacked 2,000 Pizza Hut delivery drivers from Sacramento to San Bernardino, California. “Between last fall and January, California fast-food restaurants cut about 9,500 jobs, representing a 1.3% change from September 2023,” the California Business and Industrial Alliance stated June 6 in a full-page ad in USA Today. That employment destruction surely has accelerated since the higher-wage order landed on April Fools’ Day.
- Burger King franchisee Harsh Ghai planned to install job-killing digital-order kiosks in his 140 West Coast eateries between 2029 and 2034. Instead, Ghai will deploy them all by late this month “in every single restaurant in response to the legislation to be able to balance some of these labor costs that are hitting us.”
- Citing data from Kalinowski Equity Research, KNBC Los Angeles reports that in just the first 18 days of the $20 minimum wage, fast-food prices rose 7% at Starbucks, 7.5% at Chipotle, and 8% at Wendy’s.
- Placer.ai data confirm that diners increased year-over-year visits in February and March. But as soon as the higher minimum wage and attendant price hikes arrived, foot traffic lagged in April and May: Jack in the Box dropped 0.8%. McDonald’s slid 2.43%. Wendy’s sank 3.24%. Burger King tanked 3.86%.
So, the Democratic “solution” closes businesses, kills jobs, unleashes robots, boosts prices, and repels customers, while Trump pledges to free workers from pouring their tips into the Potomac.
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