President Donald Trump made a stop in Las Vegas to discuss his administration's latest plan to exempt workers' tips from federal taxes. This proposal, initially announced during a campaign rally in June in Nevada, specifically targets employees in the hospitality and service sectors, where a large portion of the workforce is based. To move forward, the plan would require approval from the predominantly Republican-controlled Congress. Interestingly, a similar concept was advocated by former Vice President Kamala Harris during her presidential campaign.
Trump's Pledge and Engagement with Congress
During his Las Vegas visit, President Trump expressed his intention to collaborate with congressional members in the upcoming weeks to push forward a bill that aligns with his proposal. His enthusiastic supporters cheered as he reiterated his stance on eliminating taxes on tips. Additionally, he hinted at enhancing worker wages without delving into specifics during his speech.
Response from Culinary Workers Union
The Culinary Workers Union, comprising Culinary Workers Union Local 226 and Bartenders Union Local 165, which represents a significant workforce in Las Vegas and Reno, raised concerns following Trump's initial remarks in June. The union, advocating for the rights of tipped workers, criticized the proposal. Secretary-Treasurer Ted Pappageorge emphasized the need for tangible solutions over campaign rhetoric.
Call for Bipartisan Efforts and Comprehensive Solutions
In a recent statement, Pappageorge urged Republicans to collaborate with Democrats in addressing broader issues beyond the tax exemption on tips. He highlighted the importance of eliminating the sub-minimum wage and curbing corporate greed to ease the financial burdens faced by workers in the industry.
Potential Implications and Expert Opinions
Experts caution that the plan to eliminate federal taxes on tips could inadvertently lead to employers reducing wages to circumvent taxes. Martha Gimbel from Yale University's Budget Lab mentioned that the proposed system might incentivize businesses to shift more compensation to tips, potentially shifting the salary burden to customers and exploiting tax benefits.
Despite these concerns, representatives from the White House declined to comment on the matter when approached by Business Insider.
Trump's Recent Engagements
Following his Las Vegas appearance, President Trump addressed the wildfires in California and pledged support for relief efforts. He also outlined plans to redirect water resources in the state. Earlier, during his visit to North Carolina, Trump criticized the Federal Emergency Management Agency's response to Hurricane Helene.
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By: ledmonds@businessinsider.com (Lauren Edmonds)
Title: President Trump Proposes Excluding Workers’ Tips from Federal Taxes
Sourced From: www.businessinsider.com/trump-no-tax-on-tips-las-vegas-hospitality-restaurants-hotels-2025-1
Published Date: Sat, 25 Jan 2025 21:34:14 +0000
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