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Eliminating Tax on Tips Is Becoming a Campaign Priority in the Race for President

by WZMQ
August 12, 2024
A A

By Brendan Scanland

WASHINGTON, D.C. — There are millions of tipped workers across the country. In restaurants alone, over two million servers and bartenders rely on tips. For many, tips are a large part of their income.

In the race for President of the United States, both candidates have now endorsed the concept of eliminating tax on tips. 

“When I get to office, we are going to not charge taxes on tips, people making tips,” said former President Donald Trump at a rally in June. 

“When I am president, we will continue our fight for working families of America, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers,” said Vice President Kamala Harris at a rally in Nevada on Saturday. 

Getting rid of taxes on tips is picking up serious, bipartisan momentum in the middle of a major campaign season. 

“I think it’s kind of a win-win,” said Aaron Frazier, Vice President of Public Policy at the National Restaurant Association. 

“These employees overall are just vital to the hospitality that drives restaurants and really powers our economy,” said Frazier. “Anytime that we have more take home pay for employees, for restaurants and servers, that’s something that is definitely worth a conversation.” 

The idea was first floated on the campaign trail by former President Donald Trump in June. In July, the bipartisan “No Tax on Tips Act” was introduced by Senator Ted Cruz (R- TX). 

Frazier says no tax on tips is a popular policy that can help workers, in an industry hit hard by the COVID-19 Pandemic, cope with lingering impacts and high prices. 

“I think we’re all feeling the squeeze of higher prices throughout the economy. And when it comes to the No Tax on Tips Act specifically, it’s sensible legislation that could provide tax relief for tipped employees and their families. That puts more money in their pockets during this time where we’re still kind of coming out of inflation,” said Frazier. 

The No Tax on Tips Act would exempt “cash tips”—cash, credit and debit card charges, and checks—from federal income tax by allowing taxpayers to claim a 100% deduction at filing for tipped wages. 

“Tax policy can be tricky, but it plays a major role in the success of restaurants. We worked very closely with Congress on this and other common sense tax proposals that can support restaurants in every community in the country,” said Frazier. 

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