'No Tax On Tips' Reveals the Chasm Between Left and Right: Trump's 'no tax on tips' proposal may be more of a game-changer than the leftist elites believe

President Trump has focused his 2024 campaign on a number of issues that one would expect, but he shook up the game this summer by issuing a new policy proposal: “No Tax On Tips.”

While his campaign hasn’t released the usual detailed policy papers on it yet, the president made it clear what he means: “restaurant workers, hospitality workers, and anybody else who gets tips.”

The Left responded immediately with what they see as the downside: by reducing federal taxes on tips, federal revenues would drop by a huge amount of money, or at least, by an amount of money that sounds huge.

The Committee for a Responsible Federal Budget declared that this program would likely cost the federal government between $150 and $250 billion in revenues over ten years. The Democrats consider this terribly irresponsible.

But they happily spend that much in weaponry for a war between Russia and Ukraine, or for hotels, food, education, transportation and hospital bills for illegal aliens. At least President Trump’s proposal is for American workers.

And when you re-read that number, you see that the estimate is over ten years. That means the accountants are estimating a cost to the federal government averaging $15 to $25 billion per year, in a nation with a federal government currently running a $2 trillion deficit on a $6.5 trillion annual budget.

Viewed in that context, to describe President Trump’s proposal as being a drop in the bucket – a veritable rounding error -- would hardly be an exaggeration.

What’s the visual on this? The modern Left can’t bear to miss out on an opportunity to take the last dollar out of a waitress’ hand as she boards the city bus to go home at 1:00 a.m.

We agree. I support both a consumption tax and tariffs.
Right now tax law is a hodgepodge. A consumption tax sparing necessities supports savings and gives individuals choice about what to buy while supporting essential G’vt functions.
There is lots of room to prune those functions, save $ and return control to state & local levels.
Removing the complex mass of tax law saves money on federal & personal levels.
Tariffs worked very well in Trump’s hand. Prices did not go up and producers were encouraged to build plants in the USA benefiting US economy & workers.

> No, do not ever compare a tip earner to construction. <

I picked roofer in my example on purpose. You bet being a server is difficult work, for all the reasons you mentioned, and more.

But so is being a roofer. Carrying shingles up a ladder on a hot day then installing them is no fun. And I should know. I was an involuntary roofer for a week in my younger days. My father was a carpenter, and he got a roofing job. I was the laborer.

Oh come on. I am a jack of all trades who worked as a welder, carpenter, trucker, IT tech. In Arizona during the booming days around Phoenix/Tempe/Scottsdale as a rough framer, and roofer. 120 heat, went to work at 4:00 am and knocked off at noon to beat most the heat. Then I went to my restaurant job and worked as an assistant manager for a steak franchise.

I started off in construction because my family going back to me grandfather were Carpenters. hell his last name was Carpenter. So I worked construction a good part of my life. My Great Grandfather helped build the Old Faithful Inn. Then my Grandfather helped restore it after a fire and expanded it with motel rooms and all in the early 1900s into what you see today. My ancestors were homesteaders in MT.

Yet as a young man I did not like the heat of the Summer, so I got jobs in restaurants. Turned out I had management skills and was promoted to management which I did for almost 10 years.

Today at almost 67 I am a self employed handyman who does everything. Believe me when I say that working a 5 hour shift at a busy restaurant is a hell of a lot more stressful than being a roofer or framer.

Unless you are the one putting up the money, doing the carpenter work is a snap, compared to the stress of a busy restaurant. Then for a waitress to be told she must pay a set amount of taxes on money she never made is stupid, because the tax is figured on the money made on the meals she served, not on how much she actually got paid tips for.

This is because the Democrats in states add their tax, and they decide how they are figured.

> working a 5 hour shift at a busy restaurant is a hell of a lot more stressful than being a roofer or framer <

Yep. But I was comparing the overall difficulty of the jobs, not just the stress. And that’s a subjective thing, to be sure. Good people will have different opinions.

> Then for a waitress to be told she must pay a set amount of taxes on money she never made is stupid… <

0n that we totally agree. As I noted elsewhere, perhaps the fairest thing would be to eliminate the income tax and replace it with a consumption tax plus some tariffs.

I know I’m dreaming. Congress likes our current complicated tax system. There’s plenty of opportunities to do favors for special interest groups.

It is not the Governments job to make it “fair”.

But it is the government's job "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

"Proper" can mean fair, appropriate, just, correct...

I suppose the question is whether taxing tips is "necessary" or can be excluded from "wages and other compensation" for income tax purposes.

I agree with you that people are free to choose the occupation that bets fits their skills and needs, and must accept that wages and tax burdens that come with that. For some, that is motivation to improve themselves so they can earn a more lucrative wage that lessens the impact of the tax burden on them.

-PJ

Sort of. Any amount over the annual limit reduces you lifetime gift/inheritance limit:

“The 2024 lifetime gift limit is $13.61 million, up from $12.92 million in 2023. And because it’s per person, married couples can exclude double that in lifetime gifts.”

And most importantly the annual limit is per recipient, not per giver, so unless you have a very, very favorite waitress at your local, it wouldn’t be an issue.

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