No More Taxes on Tips: Trump’s Proposal for a Blue-Collar Tax Cut Is Sheer Genius

‘You do a great job of service,’ the GOP front-runner says, ‘you take care of people, and I think it’s going to be something that really is deserved.’

Andrea Piacquadio via Pexels.com
Waitresses and other service employees would stand to gain from a tax cut on tips. Andrea Piacquadio via Pexels.com

No more taxes on tips. How about that for a blue-collar tax cut? 

President Trump’s proposal for tax-free tips is sheer genius. He blasted it out at his rally at Las Vegas on Sunday.

“This is the first time I’ve said this,” he said, “and 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, people making tips.”

He added that “it’s been a point of contention for years and years and years, 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.”

This really is similar to a payroll tax cut. It reduces employment taxes, but without all the complications of the big entitlement programs.

Unfortunately, tips now are taxable income – they’re part of wages, tips, and other compensation in the W-2 IRS form.

And the Democratic Congress a couple of years ago in their war against working Americans passed an $80 billion IRS bill that theoretically would sponsor 87,000 new agents. Guess what? So far, they’ve hired 34.

Yet the Biden Democrats tried to convince us that they were really chasing after millionaires. Don’t buy it, folks.

Millionaires have layers of high-priced tax lawyers to protect them.

Only waitresses, service-oriented employees, people in the gig economy — they’re the ones the IRS is really aiming at. And tax-free tipping is going to help them a lot.

Think of your Uber driver’s 20 percent tip. Or your favorite waitress at your local diner. Or the kindly chamber maids that clean up your hotel room. They’re all going to get more money.

And that’s a big part of Las Vegas, isn’t it? Where roughly a quarter of the laborers are in the leisure and hospitality industries.

And Las Vegas is a big part of Nevada. And Nevada is an important swing state that’s a big part of a Trump presidential victory.

Now, President Biden has been happy to tax tips.

Plus, Mr. Biden’s been trying to get federal contractors to raise the minimum wage, which would price out the marginal laborer altogether.

By the way, according to the Wall Street Journal report, the head of the Culinary Union at Las Vegas likes the idea, but then he started trashing Trump.

Kind of like the United Auto Workers — the left-wing union officials don’t like Trump, but the rank-and-file are going to vote for Trump. You wait and see.

By the by, the benefit of tax-free tipping is a lot like the exemption for employer-sponsored health insurance. It’s a tax-exempt benefit used by millions and millions of businesses.

Trump is up by five points in the RealClearPolitics average of polls for Nevada, but his idea for tax-free tips will raise take-home pay for tens of millions of laborers, across the country.

Like I said, sheer genius.

From Mr. Kudlow’s broadcast on Fox Business Network.


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