Washington.- According to Donald J. Trump, the idea was born during a dinner at his Las Vegas hotel, where the waitress who was serving his table complained about the burden of paying taxes on tips.
“I was shocked to hear that,” Trump said last month at a rally in Virginia, adding that he quickly decided to address the waitress problem with a new campaign pledge: “No tax on tips!”
The proposal has quickly become more than just the topic of a rally.
The Republican Party has officially adopted it into its platform and House Speaker Mike Johnson, R-La., has said it will “pass as soon as we can.”
Some Democrats are supporting tax-exempt tips, such as the two senators representing Nevada, a swing state with large restaurant and casino industries.
The unexpected popularity of tax-free tips is a reminder of the improvisational nature of Trump’s economic policies.
Several economists advising Trump’s campaign said they had not heard of the idea until he announced it publicly.
Although Republicans see it as a key way to appeal to working-class Americans during the campaign against President Biden.
Trump has encouraged supporters to leave a note on restaurant bills telling employees that if Trump wins in November there will be no tax on tips.
About four million Americans work in workplaces where tipping is common, according to an estimate by the Yale Budget Laboratory.
Eileen Scott is a cocktail waitress at Harrah’s in Las Vegas, a casino where she earns most of her money in cash tips.
Under an agreement Harrah’s has with the Internal Revenue Service, your employer withholds taxes from your pay based on an estimate of how much you earn in tips.
That proposal means she and other employees wouldn’t have to record every tip, though Scott said the IRS also assumes she makes more than she actually does and therefore has to pay more taxes.
While Scott said he’s glad Trump proposed that, he still sides with Democrats.
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