Posted at Hartmann Report on Oct. 11, 2024
Trump’s Tax-Free Tipping Scheme: Another GOP Gift for Billionaires?
Will service workers benefit, or will hedge funds and big banks reclassify bonuses or bribes as tips?
Back in 1982, Republicans and the Reagan administration determined that they needed to raise taxes on average working people to pay for part of the massive tax break they were giving billionaires (they dropped the top income tax bracket from 74% to 28%).
Reagan imposed income taxes on elderly people on their Social Security income, ended the tax deductibility of interest on car loans and credit cards, and ended the tax deduction on two-income households.
But one of the most truculent ways Reagan went after average working people to fund his tax cuts for billionaires was to sign legislation and issue new rules requiring the IRS to more aggressively require employers to track and report tips earned by their employees, and tightening penalties on tipped workers who’d failed to report their tip income.
Speaking last month in Nevada — the state with the highest percentage of tipped workers in the nation — Donald Trump proposed eliminating taxes on tips altogether. Not to be outdone, Kamala Harris has also endorsed the idea. But there are big differences between the two.