A proposal to eliminate federal taxes on tips now has bipartisan support from the presidential candidates, and workers who rely on tips as part of their income welcome the idea.
Marcus Johns is a delivery driver who says, "They're already taxing us everywhere else. Why are they taxing on tips? It's a good initiative to eliminate that tax."
Both presidential candidates are promising to eliminate federal taxes on tips.
Vice President Kamala Harris made the promise over the weekend in Las Vegas, where thousands of casino employees support themselves on tipped wages.
"When I am president, we will continue our fight for working families of Americans, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers," she said.
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Harris' announcement echoed former President Donald Trump's promise made on June 9, when he told a rally crowd, "This is the first time I've said this, and to those hotel workers and people who get tips are going to be very happy, because when I get to office we are going to not charge taxes on tips."
Trump responded online to Harris's proposal, saying, "This was a Trump idea. She has no ideas, she can only steal from me."
Yale University's Budget Lab estimates there were about 4 million tip workers last year, most of them young. Of that group, 37% earned incomes low enough to not have to pay federal taxes at all in 2022.
The nonpartisan Committee for a Responsible Federal Budget estimates exempting tips from income and payroll taxes, which funds Medicare and Social Security, would reduce federal revenues by $150 billion to $250 billion over the next decade.
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