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Donald Trump’s Tips-Tax Gambit. He plays Biden-lite on tax policy with a carve-out for tipped income. His 2017 tax reform was better policy.
Wall Street Journal ^ | June 17, 2024 | WSJ Editorial Board

Posted on 06/19/2024 10:47:07 AM PDT by karpov

The election campaign between Donald Trump and Joe Biden is so far largely a personal showdown, but their policy ideas matter to the country’s prosperity. Mr. Trump can claim the better record on the economy, thanks in part to his 2017 tax reform, so it’s too bad he’s now floating special-favor tax ideas like exempting worker tips from federal taxes.

“For those hotel workers and people that get tips, you’re going to be very happy,” Mr. Trump said on a recent swing through Nevada, “because when I get to office, we are going to not charge taxes on tips.” He repeated the line in Florida: “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 political play for working-class voters here is blatant, and no doubt it will be popular with tipped workers. Mr. Trump at least wants to reduce taxes (except for tariffs), while Mr. Biden is promising several trillion dollars in tax increases. Mr. Trump’s play to hotel workers and waiters is also less economically damaging than President Biden’s vote-buying with welfare spending and student-loan forgiveness. Exempting tips could encourage more work among some parts of the labor force.

But Mr. Trump is pitching another carve-out that would erode the tax base. Many tips currently go unreported as income, and the lost revenue from an exemption is hard to estimate. The Committee for a Responsible Federal Budget, which dislikes most tax cuts, figures the exemption would cost the federal fisc at least $150 billion over 10 years.

One problem is that workers and many employers will inevitably rearrange their income to exploit the tips tax advantage.

(Excerpt) Read more at wsj.com ...


TOPICS: Business/Economy; Editorial; Politics/Elections
KEYWORDS: fusiongps; glennsimpson; peterfritsch; rinopropaganda; tipstax; trump; wsj; wsjrussiadossier
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To: Segovia

“””””that electrician and that plumber are already making sixty bucks an hour”””””

Sure they are, just like that waitress is making $100.00 off that meal you and your wife just ate.

Don’t confuse the company charges with the employee who is down there crawling around in the cold water and mud under your house.


41 posted on 06/19/2024 1:17:08 PM PDT by ansel12 ((NATO warrior under Reagan, and RA under Nixon, bemoaning the pro-Russians from Vietnam to Ukraine.))
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To: ansel12
You keep bringing up hookers as "people you tip" every time this subject comes up.

I would find that interesting but mostly I just find it icky.

42 posted on 06/19/2024 1:59:04 PM PDT by Harmless Teddy Bear ( Roses are red, Violets are blue, I love being on the government watch list, along with all of you.)
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To: Harmless Teddy Bear

I never have done that, you seem to be a dedicated liar.


43 posted on 06/19/2024 2:00:51 PM PDT by ansel12 ((NATO warrior under Reagan, and RA under Nixon, bemoaning the pro-Russians from Vietnam to Ukraine.))
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To: Harmless Teddy Bear

“Tips are gifts and should not be taxed.” Thank you! It is also why restaurant/bar owners pay a mere pittance in hourly wages, too-a waitress/waiter who has learned good customer service skills will make up the difference-if they can’t then they need to chose a job that is not so customer service oriented. Unless restaurants are going to start paying the high minimum wage, then hell yes those tips should be tax-free. One of the neighbors owns a small farm-to-table restaurant and bar here and they like Trump’s idea, too...

Having paid my way through college as a food and cocktail waitress, I learned customer service-I use those skills even more as a comp case manager-clients are customers, too. Except for the late hours, being a cocktail waitress was easier and the pay per hr + tips was close...


44 posted on 06/19/2024 2:00:53 PM PDT by Texan5 ("You've got to saddle up your boys, you've got to draw a hard line"...)
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To: NorthMountain
Tips are payments for services rendered.

Payments for services rendered are required.

That is why the "service payment" of 18% you pay when you have a party of twelve in a restaurant is not optional. You must pay it and they can sue you if you do not. In fact you can be arrested if you do not.

Tips however are optional. No one will show up on your door step with a warrant if you do not leave a tip.

Thus tips are gifts not wages and should fall under the gift exemption.

45 posted on 06/19/2024 2:03:22 PM PDT by Harmless Teddy Bear ( Roses are red, Violets are blue, I love being on the government watch list, along with all of you.)
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To: ansel12
Yes, you do.

Strippers and topless dancers, in other words, hookers and usually drug addicts, are your first example every time the idea of tipping is mentioned.

If fact you implied previously how you know because you "dated" hookers.

This is a part of your life I really wish you would keep to your self.

46 posted on 06/19/2024 2:06:50 PM PDT by Harmless Teddy Bear ( Roses are red, Violets are blue, I love being on the government watch list, along with all of you.)
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To: Harmless Teddy Bear

do you “tip” the waiter who served that table over there, but not your table?

No, you don’t.

You tip the waiter who served YOUR table. You pay him for the work he did for you.

“No one will show up on your door step with a warrant if you do not leave a tip” because you have no contract with the waiter that people with a warrant can enforce.

Nevertheless, it’s still payment for work.


47 posted on 06/19/2024 2:10:08 PM PDT by NorthMountain (... the right of the people to keep and bear arms shall not be infringed)
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To: Harmless Teddy Bear

You really are a weird guy, and a liar, I never brought up hookers and never brought dancers first, I have mentioned tip employees and that also includes topless dancers, I asked you once if you have ever dated any strippers or topless dancers.

On another thread you did this nasty trolling, personal attacks, making up fake posts and talking about hookers.
You are doing the exact same thing on this thread.


48 posted on 06/19/2024 2:22:51 PM PDT by ansel12 ((NATO warrior under Reagan, and RA under Nixon, bemoaning the pro-Russians from Vietnam to Ukraine.))
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To: NorthMountain

I wonder if these guys tip in all these situations.

A girl brings your food to your table in a steakhouse, a fast food girl brings your food to your table at Wendys, a fast food girl carries your food out to your car at Jack in the Box when you pulled out of the window line to wait.


49 posted on 06/19/2024 2:26:57 PM PDT by ansel12 ((NATO warrior under Reagan, and RA under Nixon, bemoaning the pro-Russians from Vietnam to Ukraine.))
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To: ansel12

Can’t speak for others, but:

Yes (and generously if the work is very well done)

No

No


50 posted on 06/19/2024 2:38:10 PM PDT by NorthMountain (... the right of the people to keep and bear arms shall not be infringed)
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To: NorthMountain

And the reason is that we all know that tips are about getting paid, not just nice people giving you free money because you are at work and you are doing your job.


51 posted on 06/19/2024 2:42:03 PM PDT by ansel12 ((NATO warrior under Reagan, and RA under Nixon, bemoaning the pro-Russians from Vietnam to Ukraine.))
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To: karpov

“ The Committee for a Responsible Federal Budget, which dislikes most tax cuts..”

But they never met a spending bill they didn’t like.

Here’s the thing. ANYTIME an even a small partof our population can toss off some the yoke of confiscatory taxes it should be celebrated.

L


52 posted on 06/19/2024 2:49:32 PM PDT by Lurker ( Peaceful coexistence with the Left is not possible. Stop pretending that it is.)
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To: karpov

It could be the opening gambit in getting rid of the incomentax


53 posted on 06/19/2024 4:10:30 PM PDT by xzins (Retired US Army chaplain. Support our troops by praying for their victory. )
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To: karpov

He’s winning over many voters in the state of Nevada, and any state where tourism is number one, with this policy - smart.


54 posted on 06/19/2024 6:02:02 PM PDT by jacknhoo (Luke 12:51; Think ye, that I am come to give peace on earth? I tell you, no; but separation.)
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To: NorthMountain
No, it is a gift for service.

I can not order the waiter to do anything, only ask. Because I am not their employer.

I am giving them a gift to show my appreciation for their efforts on my behalf.

Non-taxable.

55 posted on 06/19/2024 6:45:35 PM PDT by Harmless Teddy Bear ( Roses are red, Violets are blue, I love being on the government watch list, along with all of you.)
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To: Harmless Teddy Bear

Payment for services rendered. Only given to someone who does some work for you. Not given to someone who does nothing for you.

Taxable.


56 posted on 06/19/2024 8:21:43 PM PDT by NorthMountain (... the right of the people to keep and bear arms shall not be infringed)
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To: 9YearLurker

Make up for what?


57 posted on 06/20/2024 4:18:02 AM PDT by frogjerk (More people have died trusting the government than not trusting the government.)
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To: itsahoot
Even worse is the worthless guy that works with you gets a share of your tip. I don't know if that is voluntary or law but many businesses pool tips and divide them up at end of day.

That is a business decision. Good servers will leave and go somewhere else where they are rewarded for their work fairly rather than splitting it with the lazy ones.

58 posted on 06/20/2024 5:36:42 AM PDT by frogjerk (More people have died trusting the government than not trusting the government.)
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To: NorthMountain
Payment for services rendered.

Nope that would be their wages.

Tips are gifts.

Only given to someone who does some work for you. Not given to someone who does nothing for you.

Rarely do you give gifts to people who do nothing for you.

For example, you take over a business, you can give the owner and spouse, up to $18,000 a year each for the rest of their lives legally and it falls under "gift tax exemption" and no taxes are owed.

Exempt.

Tips, which are much smaller amounts, are gifts.

And should be exempt.

59 posted on 06/20/2024 1:14:50 PM PDT by Harmless Teddy Bear ( Roses are red, Violets are blue, I love being on the government watch list, along with all of you.)
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To: Harmless Teddy Bear

You are wrong from beginning to end.

You give a waiter a “tip” because he did some work for you.

YOU PAID HIM FOR DOING WORK.

But you’re entrenched in some sort of odd ideology, and immune to facts and reason.

Goodbye.


60 posted on 06/20/2024 1:18:03 PM PDT by NorthMountain (... the right of the people to keep and bear arms shall not be infringed)
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