Former President Donald Trump is aggressively pushing a new policy on the campaign trail: to eliminate taxes on tips. He works it into many of his speeches, and supporters have even started writing "Trump 2024 — no taxes on tips" on merchant copies of restaurant receipts as a kind of popup campaign advertising.
But unions for tipped workers and labor activist groups aren't amused by it, reports Rolling Stone — and dismiss it as a stunt that won't address real issues for their members.
“What people really need and want is higher wages that allow them to deal with the everyday cost of living and the everyday bills they have to deal with,” said Saru Jayaraman, President of One Fair Wage. “It’s a nice campaign tool to pander to people, but it won’t actually solve the problems that most people have.”
“I was a tip earner. My parents were tip earners. We’ve been in this thing for 30 years fighting on this,” said Ted Pappageorge, Secretary-Treasurer for the Culinary Union in Las Vegas, a massive political force in Nevada.
“Trump’s been missing in action on all of this. As a president, he did nothing about this, and when he wasn’t president — the last four years — nothing. So when politicians started throwing around promises out here in Vegas, out here at Sunset Park, our members are pretty skeptical.” Pappageorge has already dismissed this proposal in an earlier statement after Trump first dropped the idea at a Vegas rally.
Part of the problem is that little of the tax savings would even go to low-income workers; around half of tipped workers make too little to even pay income tax in the first place, meaning that eliminating taxes on tips, would mostly benefit higher-paid, more upscale service workers at high-end restaurants and clubs, at a cost to taxpayers of around $250 billion over 10 years. There are also concerns that it would take pressure off of restaurants to raise base wages, which can legally be as low as $2.13 an hour for tipped workers.
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This comes at a key moment as President Joe Biden, who has made expanding labor rights a core part of his presidency, seeks to consolidate union support for re-election. Teamsters President Sean O'Brien triggered outrage among his own membership when he decided to speak at both the Republican and Democratic conventions, in particular giving a speech to the RNC that appeared to laud a handful of Republicans.
