Our campaign is a fight for the future.
We are not going back. pic.twitter.com/dRB3FQTLno
— Kamala Harris (@KamalaHarris) August 11, 2024
Vice President Kamala Harris and former President Donald Trump have found common ground on a surprising issue: eliminating taxes on tips. At a recent campaign rally in Nevada, Harris pledged to fight for working families by raising the minimum wage and eliminating taxes on tips for service and hospitality workers. Trump, who has advocated for this policy since June, criticized Harris’s move, claiming she stole his idea.
She is 3 weeks into her campaign …and this is already telling us that she has no idea of what she’s into.
No offense and I like her personally, but this is not her cup of tea !
https://t.co/XeTrlwAyPx— حسن سجواني 🇦🇪 Hassan Sajwani (@HSajwanization) August 11, 2024
A Harris campaign official countered, asserting that her proposal includes specific measures to prevent misuse by high-income individuals and would be coupled with a minimum wage increase. The proposal has gathered bipartisan momentum on Capitol Hill, with Sen. Ted Cruz introducing the “No Tax on Tips Act” in July, supported by Democratic Senators Catherine Cortez Masto and Jacky Rosen of Nevada.
A companion bill introduced by Rep.
Tax relief pledges draw skepticism
Byron Donalds is advancing in the House.
Trump says that Kamala Harris "in my opinion has a very low IQ" pic.twitter.com/PSUflQbdWR
— Aaron Rupar (@atrupar) August 10, 2024
However, economists are skeptical of the policy. Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, critiques the proposal on the grounds of equity, efficiency, and revenue implications. He argues that a tax-free tips policy would benefit workers unevenly and could lead to significant revenue losses.
Garrett Watson, a senior policy analyst at the Tax Foundation, agrees with Rosenthal’s criticisms, citing a recent study suggesting only 2.5% of workers would benefit from the policy. The Culinary Workers Union Local 226, a powerful labor group in Nevada, has endorsed Harris’s policy, highlighting the potential historic significance of electing the first woman president and supporting fair taxation on tips. As of now, neither campaign has unveiled a comprehensive policy proposal on tax-free tips.
The debate continues as both political figures advocate for tax relief in the service sector, while economists warn of potential drawbacks.
