Trump proposes ending taxes on tips

Former President Trump on Sunday said he would end taxes on tips as the “first thing” he does in office if reelected, marking his latest push to appeal to voters in the service industry.

“For those hotel workers and people that get tips, you’re going to be very happy. Because when I get to office, we are going to not charge taxes on tips,” Trump said at a rally in Las Vegas.

“We’re not going to do it, and we’re going to do that right away, first thing in office, because it’s been a point of contention for years and years and years,” he added. “And you do a great job of service, you take care of people and I think it’s going to be something that really is deserved.”

Changes to taxation on tipped income would require congressional approval. Lawmakers will look at the nation’s tax policy next year upon the expiration of Trump’s 2017 Tax Cuts and Jobs Cut Act (TCJA), which cut the corporate tax rate and brought down individual tax rates depending on the tax credit.

As the law currently stands, service workers are required to report their tips to the IRS, which views tips as regular taxable income.

The 2017 Trump tax cuts did not include provisions on tips, but if Republicans retake the White House and Senate and hold the House, they would have the opportunity to add to and extend Trump’s previous policies.

Trump, in a later post on Truth Social, went after President Biden in an attempt to contrast himself from the incumbent’s policy on taxes.

“Crooked Joe Biden has taken the totally opposite approach, trying to TAX more and more of their Tips, even hiring 88,000 IRS Agents to collect!” Trump wrote.

“Hopefully Rank and File Union Members, Union Leadership itself, and Workers all over the Country, both Union and Non-Union, will support Donald J. Trump, because I’m NO TALK AND ALL ACTION! TRUMP KEEPS HIS PROMISES, AND STANDS WITH OUR GREAT WORKERS. PROMISES MADE, PROMISES KEPT!” he added.

Biden has called for a series of tax hikes on wealthy individuals and big businesses, releasing a proposal in March that would establish a wealth tax on individuals worth more than $100 million. He also proposed raising the corporate tax rate closer to the pre-Trump level.

Biden has also pushed for increases to the federal minimum wage and phasing out the tipped minimum wage for restaurant service workers.

In 2021, the Department of Labor under Biden reversed a Trump-era policy when it issued a final rule limiting when employers can pay workers the lower tipped minimum wage for doing non-tipped tasks, per Reuters.

The Hill reached out to Trump’s campaign for further comment.

The Culinary Workers Union Local 226, based in Las Vegas, criticized Trump’s pledge on Sunday.

“Relief is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon,” Culinary Union Secretary Treasurer Ted Pappageorge wrote in a statement.

—Updated at 12:33 p.m.