President Donald Trump unveiled his plan to eliminate taxes on tips during a speech in Las Vegas, aiming to connect with hospitality workers in a key battleground state.
At a Glance
- Trump proposes “no tax on tips” policy for hospitality workers
- Plan requires Congressional approval, with Republicans holding majorities
- Over 4 million workers, including 700,000 single mothers, depend on tip income
- Experts warn of potential unintended consequences, such as lowered wages
- Trump criticizes Biden administration and DEI initiatives
Trump’s Promise to Hospitality Workers
During a recent visit to Las Vegas, President Donald Trump reiterated his campaign promise to eliminate federal taxes on tips for hospitality workers. Speaking at the Circa Resort and Casino, Trump outlined his vision for a policy that would significantly impact the service industry, particularly in Nevada where a quarter of a typical restaurant worker’s pay comes from gratuities.
Trump’s proposal aims to appeal directly to American workers, especially in a state with a high concentration of tipped employees. “Any worker who relies on tips [as] income, your tips will be 100% yours,” Trump said. This statement underscores the potential impact of the policy on millions of workers nationwide.
President Donald Trump is using a stop Saturday in Las Vegas to offer details on how he can begin excluding tips from federal taxes, betting that a city built on gambling and the hospitality industry will relish taking home larger slices of gratuities.https://t.co/HMzauTHnMI
— PBS News (@NewsHour) January 25, 2025
Industry Response and Potential Challenges
The proposal has garnered support from some industry leaders. Rosanna Maietta, CEO of the American Hotel and Lodging Association, expressed enthusiasm for the plan, stating, “The ‘no tax on tips’ builds on that momentum. So, we are so excited to support you in that effort.” However, the Culinary Workers Union has criticized the proposal, emphasizing the need for broader solutions, including addressing the $2.13 sub-minimum wage.
“I am here to tell you that the American dream is alive and well in the hotel industry today,” Maietta said.
Experts have raised concerns about potential unintended consequences of the policy. Martha Gimbel from Yale University highlighted the possibility of employers lowering wages in response to untaxed tips. This could create a scenario where workers’ overall compensation remains unchanged, despite the tax exemption on gratuities.
Trump’s focus on this issue is part of a broader worker-focused policy platform for his 2024 presidential campaign. The President emphasized the significance of tip income, noting, “You think that had an impact on the election? What, a half a point? It’s pretty big….nationwide over four million workers depend on tip income, including an estimated 700,000 single moms.”
“We’re going to get it for you — ‘no tax on tips’,” Trump said.
The proposal to eliminate taxes on tips is reportedly a priority for Republicans in Congress as part of a larger tax package. However, it’s important to note that the plan would require Congressional approval to become law. Trump has pledged to work with Congress to ensure the proposal’s passage if elected.
During his Las Vegas speech, Trump also touched on other aspects of his campaign platform. He criticized the Biden administration, associating it with incompetence and inflation. Additionally, Trump highlighted his administration’s past efforts to reduce federal Diversity, Equity, and Inclusion (DEI) initiatives, referring to them as “woke crap.”
“We got rid of the woke crap. A lot of crap…you know, these people were petrified of it. I’ll tell you, these companies, they run these big companies, they were petrified of it,” Trump said.
Trump’s “no tax on tips” proposal serves as a cornerstone of his economic message, particularly aimed at service industry workers.
Promises made…and soon, it’s a promise kept!