For all intents and purposes, Republican presidential nominee Donald Trump’s “No Tax on Tips” initiative is a winner across the boards.
The former president has pledged to stop tips from being subject to taxes if he wins a second term in the White House in November, and a Newsweek-commissioned poll by Redfield & Wilton Strategies showed that 67 percent of Americans do not believe tips should be taxed. As the outlet noted, current law requires that all cash and non-cash tips received by an employee be treated as income, subjecting them to income and payroll taxes.
Interestingly, Gen Z respondents were the least likely to support the proposal, but 59 percent were still on board. Millennials and Gen Xers were more likely to be in favor of abolishing taxes on tips by 70 and 74 percent, respectively, according to Newsweek.
Even in today’s highly polarizing political climate, there was widespread bipartisan support, with 68 percent of Republicans on board, compared to 65 percent of Democrats.
Trump vowed to address the issue in June while speaking at a rally in Nevada — the state reportedly has the highest concentration of service workers in the country.
Trump: “When I get into office, we’re not going to charge taxes on tips.” This is HUGE for Americans in the service industry.
— Dinesh D’Souza (@DineshDSouza) June 10, 2024
“To those hotel workers and people who get tips, you are going to be very happy, because when I get to office we are going to not charge taxes on tips, people making tips,” Trump said. “We’re going to do that 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 rely on tips for their earnings, they are working their tails off,” 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 estimating that Trump’s plans would reduce federal revenues by $150 billion to $250 billion over 10 years “and could reduce revenue significantly more once behavioral effects are incorporated.”
“Although the Trump campaign has not outlined its proposal in detail, we assume it would make tip income exempt from federal income and payroll taxes,” the report said. “On a static basis, we estimate this would reduce revenue by $150 to $250 billion between Fiscal Year (FY) 2026 through FY 2035, depending on how fast tip income grows and over what distribution of income it is concentrated.”
Trump proposed another popular idea Wednesday during a rally in Harrisburg, Pennsylvania, when he said, “Seniors should not pay taxes on social security!”
No tax on Tips!
No Tax on Social Security! pic.twitter.com/8tF199EA1L
— Genevieve (@GenevieveBayer) August 2, 2024
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
Tom Tillison grew up in Maryland before moving to Central Florida as a young teen. It is in the Sunshine State that he honed both his passion for politics and his writing skills. Tillison also contributes to BizPac Review.
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