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Former President Trump to talk about 'no tax on tips' policy
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8/23/2024
Former President Trump to talk about 'no tax on tips' policy
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News
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00:00
The Trump campaign is now showcasing its No Tax on Tips program in an event this afternoon
00:07
in Las Vegas.
00:08
It's an idea gaining traction on both sides of the aisle in Washington.
00:11
ABC's Jay O'Brien joins me now along with Alexis again for more on this.
00:15
Jay, Trump's campaign has basically accused Harris of stealing this idea of No Tax on
00:20
Tips.
00:21
Why has it become so popular with both campaigns?
00:24
Yeah, and it's something we've seen the Harris campaign really lean into, including here
00:28
at the Democratic National Convention.
00:30
And one of the reasons why is because it is popular, particularly in a state like Nevada,
00:35
for instance, where there are a number of service industry workers.
00:38
It is correct that Trump pitched this policy first and Harris pitched a version of it.
00:43
So he did come first with this policy.
00:45
And we have heard some criticism, frankly, on it from both sides of the aisle.
00:49
Because while it's politically expedient, because it might work in a key swing state
00:53
like Nevada, there's also concerns that, you know, you would be giving a tax break
00:57
to potentially some service workers, but not others.
01:00
You know, people waiting tables, but not necessarily cooks in the back of the kitchen.
01:04
So there's questions as to its efficacy.
01:07
But in the reality, both campaigns seem to be making the calculus that it could win them
01:11
votes.
01:12
Alexis, there are also questions about the impact here, right?
01:14
It sounds great to say, especially if you are a service worker.
01:16
But what is the impact of the national on the national economy if you stop taxing tips
01:21
altogether?
01:22
So what we're hearing here is what will the cost be?
01:24
What will the revenue lost amount to?
01:27
And depending on who you look at, it could be upwards of $250 billion over 10 years.
01:33
If you eliminate federal taxes from workers tips, Trump wants to go a step further and
01:38
also say payroll taxes are exempt.
01:40
The question becomes, where do you get that money from?
01:43
And also some are saying this really does not amount to a tax cut for low and middle
01:47
income workers.
01:49
It's actually going to be a boost for employers, because if you're not going to tax the wages,
01:55
the tips, then does the company not have to increase their base salary for these workers
02:00
who rely on tips?
02:01
And so they're saying that the employer could benefit from this by not then being motivated
02:07
to increase their base salary.
02:08
Are they motivated to do that now?
02:10
Well, look, they're they're really not because the minimum wage hasn't gone up much.
02:14
And the minimum wage for these workers is different because it's not the regular federal
02:19
minimum wage because they are dependent on tips.
02:21
That's part of their overall equation.
02:23
I think a lot of economists are saying the better way to deal with this is to either
02:26
raise the minimum wage, something that Harris has put her support behind, but also increasing
02:31
things like the child income tax credit, the earned income tax credit, which would help
02:35
a broader base of low and middle income workers, not just those reliant on tips.
02:40
Interesting.
02:41
J. O'Brien, Alexis Christophers.
02:42
Thank you both.
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1:49
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