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Donald Trump calls for ending taxes on tips, drawing mixed reaction from Republicans
NBC News ^ | June 18, 2024 | Scott Wong and Sahil Kapur

Posted on 06/19/2024 6:38:01 AM PDT by Red Badger

While many Trump allies cheer the fledgling idea, which the former president has been touting lately, other conservatives are skeptical. One analysis says it'd cost up to $250 billion.

WASHINGTON — In his private meeting with Senate Republicans last week, former President Donald Trump joked that a new campaign pitch has made him very popular with the caddies at his golf course near Mar-a-Lago: ending taxes on money earned from tips.

It’s an idea that was cheered in the room of senators and one that Trump is likely to return to as he courts working-class voters in swing states with large service industries, like Nevada, Arizona and Georgia, in his rematch this fall with President Joe Biden.

But it's unclear whether the election-year talking point will materialize as a serious policy plan on Capitol Hill. Several influential Republicans told NBC News they're skeptical of the idea, citing the rising national debt and questioning whether it would be fair to earners who don't make tips.

Trump also mentioned his desire to end taxes on tips in an earlier meeting with House Republicans, said Rep. Tim Burchett, R-Tenn, who added that Trump recounted to lawmakers how a waitress gave him the idea.

“This thing has really just organically caught fire,” Burchett, a Trump ally, said Monday, calling Trump's proposal “smart politics.”

Three GOP senators who listened to Trump’s remarks in a separate closed-door meeting mentioned his tax-and-tips pitch, unprompted, as they left last week. Sen. Ted Cruz, R-Texas, a onetime Trump rival, said that the idea is “terrific” and that it could shift voter perceptions of the parties.

“For someone that’s working as a waiter or waitress or someone that’s working as a taxicab driver or someone who’s working as a bellhop at a hotel, there are a lot of people who are starting to climb the economic ladder who rely on tips,” said Cruz, who faces his own re-election battle this year in Texas. “The caricature of Republicans is that Republicans were the party of the rich and Democrats are the party of the poor and the working class.”

Other Republicans are skeptical of the fledgling proposal.

“I don’t know about just making a unilateral decision about tips versus focusing on workers generally,” Rep. Chip Roy, R-Texas, an influential conservative, said in an interview. “Like, why would you favor tip-earners versus another person who makes similar wages? ... That might even pose some legal questions in terms of how you’re treating one person versus another.”

“The idea of making sure that hard-working families are not being burdened by taxes? Good. Differentiating between tips versus non-tip, not sure I fully buy that,” Roy said.

Rep. Vern Buchanan, R-Fla., the vice chair of the tax-writing Ways and Means Committee, also said he’s not sold on the idea of reclassifying how tips are taxed, citing the growing national debt.

“You’ve just got to be careful with it. We’re running these trillion-dollar deficits. Got to be careful with all of this.,” Buchanan said. “I want to be sensitive, because they work hard. And obviously a big part of their earnings is tips. All these programs sound good; everybody likes to pay less taxes. But we got to pay the bills.”

According to the IRS, all cash and non-cash tips are subject to federal income taxes. That means Congress would need to step in and pass a law to exempt tips from being taxed in the future. Major parts of the Trump tax cuts expire at the end of 2025, and, if he's elected, Trump's idea about tips could land on the menu for policymakers looking to rewrite the tax code.

Such a move would have significant impacts on the debt.

The Committee for a Responsible Federal Budget, a research group that advocates for cutting red ink, estimated in a paper Sunday that exempting tips from income and payroll taxes could cut federal revenue by as much as $250 billion over 10 years.

Asked whether the campaign has policy details or a cost estimate, Trump spokeswoman Karoline Leavitt said in an email: “President Trump intends to ask Congress to eliminate taxes on tips to put more money back in the pockets of hardworking service workers. On the contrary, Joe Biden has aggressively stepped up the IRS going after tip workers.” (The White House says the extra IRS funds Biden secured are about improving customer service and targeting wealthy tax evaders, not low- or middle-income earners.)

Lael Brainard, a top Biden White House adviser, responded cautiously when she was asked about Trump’s tip idea, citing the Hatch Act prohibitions on political activity by West Wing officials.

Broadly, Brainard told reporters in a call last week, Biden has “fought for real solutions that actually address workers’ legitimate need for fair wages” and has better ideas for Nevada wage earners — including a higher minimum wage and overtime protections.

“So our view is that the meaningful set of policy changes that would really lift the living standards of Nevada workers and workers all around the country would be to raise the minimum wage and eliminate the tipped minimum wage, leading to $6,000 more in income per year,” she said.

A day after he visited Capitol Hill, as he celebrated his 78th birthday with supporters at the West Palm Beach Convention Center in Florida, Trump retold the story of the tips proposal in greater detail. He was at a restaurant in Las Vegas and asked a waitress what it would take to win her vote. She told him to eliminate taxes on tips, Trump said. To spread the word, he then instructed his supporters to write on their restaurant receipts: “Vote for Trump because there’s no tax on tips.”

A Trump loyalist, Rep. Marjorie Taylor Greene, R-Ga., did just that, tweeting a photo of a receipt with the message "VOTE TRUMP! no tax on tips!!"

Rep. Byron Donalds, R-Fla., another Trump ally, also cheered the idea.

“Listen, as a former waiter — I waited tables in college and a little bit after college — I think we should definitely do that,” Donalds said. “Waiters, waitresses, service staff — they work hard every day. They work hard, and they’re not millionaires. To go after them like that doesn’t make any sense to me.”

And Sen. Kevin Cramer, R-N.D., who relayed Trump’s story about his caddies, also sees the tips proposal as a way to win over voters: “The tips issue is good for Trump and Republicans. Working-class voters have not been this pro-Republican since Reagan,” Cramer said in a brief interview Monday.

Burchett said the economic impact would be positive despite the red ink the policy could create.

“I’m of the belief that these folks aren’t going to stuff that in a mattress or bury it in a Mason jar in your backyard. They’re going to put it back in the economy pretty quick,” he said. “I would rather Americans invest that rather than the federal government steal it.”


TOPICS: Business/Economy; Culture/Society; Government; Politics/Elections
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To: Red Badger

NBC News = Fake News


81 posted on 06/19/2024 9:30:16 AM PDT by McGruff (Don't underestimate Joe's ability to f*** things up - Barack Obama)
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To: Red Badger

These people are economic morons.“

No they are rat propagandists.


82 posted on 06/19/2024 9:33:16 AM PDT by gibsonguy
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To: larrytown

What a POS this clown is. Maybe stop funding foreign wars for starters.


83 posted on 06/19/2024 9:34:01 AM PDT by HYPOCRACY (Brandon's pronouns: Xi/Hur)
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To: gibsonguy

A propagandist doesn’t believe his own propaganda.

These people are true believers................


84 posted on 06/19/2024 9:34:39 AM PDT by Red Badger (Homeless veterans camp in the streets while illegals are put up in 5 Star hotels....................)
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To: Red Badger
Reality...The tip money would go right back into the economy...where the Feds wouldn't get their cut...which they waste anyways.

In other words...local governments would benefit as well as the good people in this service industry.

85 posted on 06/19/2024 9:51:49 AM PDT by Sacajaweau
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To: Red Badger

Exactly. Even if it did “cost “ 250 billion thats one silly welfare program.

Gee, youd think they could find 250 billion in money they don’t need to spend.

Like in Ukraine?


86 posted on 06/19/2024 9:53:46 AM PDT by Fledermaus (We Are Now In A Civil War!)
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To: Red Badger

I wrote the same. It would be a great benefit to have this untaxed money going into the local economy. Much better use of the money.


87 posted on 06/19/2024 10:03:09 AM PDT by Sacajaweau
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To: gathersnomoss

The nice people tax us to tax us.


88 posted on 06/19/2024 10:04:27 AM PDT by sasquatch (Do NOT forget Ashli Babbit! c/o piytar)
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To: Red Badger
"Rep. Vern Buchanan, R-Fla., the vice chair of the tax-writing Ways and Means Committee, also said he’s not sold on the idea of reclassifying how tips are taxed, citing the growing national debt."

And who's fault is that?

89 posted on 06/19/2024 10:07:55 AM PDT by grimalkin (Communism is the final logic of the dehumanization of man. -Fulton J. Sheen)
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To: GOPJ

Typical msm headline and analysis, along the lines of “in controversial move, Trump proposes severe punishment for rape and murder.”


90 posted on 06/19/2024 10:09:15 AM PDT by daler
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To: Red Badger
> These people are economic morons...............

No, they are evil.

They know every penny they take from you gives them more power.

91 posted on 06/19/2024 10:10:12 AM PDT by SecondAmendment (The history of the present Federal Government is a history of repeated injuries and usurpations ....)
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To: Red Badger
The White House says the extra IRS funds Biden secured are about improving customer service and targeting wealthy tax evaders, not low- or middle-income earners

Not true

92 posted on 06/19/2024 10:20:44 AM PDT by newzjunkey (We need a better Trump than Trump in 2024.)
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To: Red Badger

Remember for them “cuts” are reductions in budget increases. In their world government is owed all capital. We’re serfs who serve at its pleasure


93 posted on 06/19/2024 10:22:40 AM PDT by newzjunkey (We need a better Trump than Trump in 2024.)
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To: Alberta's Child

Agreed. Can’t do one without addressing the other.


94 posted on 06/19/2024 10:23:23 AM PDT by newzjunkey (We need a better Trump than Trump in 2024.)
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To: Dr. Franklin
Whenever possible, I tip in cash. It doesn't leave a record.

Ditto. Having worked as a bartender for many years, I know how much cash is appreciated. If the server chooses to declare it or not is his choice.

95 posted on 06/19/2024 10:32:42 AM PDT by JimRed (TERM LIMITS, NOW! Finish the damned WALL! TRUTH is the new HATE SPEECH! )
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To: Fido969

“ While the employee pays FICA and medicare tax on tips, a large part of tips are not subject to the employer portion of the FICA and Medicare tax.”
**********************************************************************

I did not know that. Upon which part of the employee tip income does the employer not have to pay FICA and Medicare?


96 posted on 06/19/2024 10:49:43 AM PDT by House Atreides (I’m now ULTRA-MAGA-PRO-M)
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To: Owen

If that is the case, then the theory that elites are trying to kill off the ‘surplus population’ - doesn’t sound that insane anymore.


97 posted on 06/19/2024 11:09:07 AM PDT by larrytown (A Cadet will not lie, cheat, steal, or tolerate those who do. Then they graduate...)
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To: ConservativeMind

Exactly


98 posted on 06/19/2024 11:18:35 AM PDT by MeanWestTexan (Sometimes There Is No Lesser Of Two Evils)
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To: Red Badger

“Rep. Vern Buchanan, R-Fla., the vice chair of the tax-writing Ways and Means Committee, also said he’s not sold on the idea of reclassifying how tips are taxed, citing the growing national debt. “


This clown has voted $200 billion for Ukraine, but suddenly taxes on tips is “too expensive”.


99 posted on 06/19/2024 11:22:02 AM PDT by Reverend Wright ( Everything touched by progressives, dies !)
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To: Red Badger

people that hustle in the restaurant business are not doing it for their health.
It’s bust ass work. Let them keep their tips tax free.


100 posted on 06/19/2024 11:23:13 AM PDT by ronniesgal (have you even tried to mind your own business?)
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