U.S. Vice President Kamala Harris (left) and former President Donald Trump
Reuters
Vice President Kamala Harris has pledged to eliminate the tip tax on the service and hospitality industries if she wins the presidency, echoing the same proposal announced by former President Donald Trump months ago.
According to reports in June, both candidates promised tax-free tips at separate rallies in Las Vegas, directly appealing to voters in Nevada, a key battleground state whose hospitality industry employs about a quarter of the workforce. Number of people employed.
“it This is my promise to all of you here that when I am president, we will continue to fight for America’s working families,” Harris said at a rally in Las Vegas on Saturday, including raising the minimum wage and eliminating restrictions on services. and a tax on tips for hotel workers, the campaign said the rally attracted more than 12,000 people.
The proposal comes a day after the Culinary Workers Alliance, Nevada’s main labor group, endorsed Harris. Ahead of Saturday’s rally, Harris said her campaign plans to unveil an official economic policy platform in the coming days.
Trump quickly took to social media to claim his approval of the proposal, which he proposed at his Las Vegas rally in June.
“[Harris]has no imagination whatsoever, and as the fact that she plays ‘copycat’ shows, tips are not taxed!” Trump wrote in a post truth society Posted on Saturday night.
Harris campaign officials later acknowledged that banning taxes on tips would require new legislation and congressional approval.
The campaign official said Harris would work with members of Congress to enact a tax-free tip policy that would have income limits and would prevent “hedge fund managers and attorneys from structuring compensation in a way that attempts to take advantage of the policy.”
The warnings come in response to some criticism that has emerged over a ban on tip taxes.
According to non-partisan sources committee for a responsible federal budgetEliminating the service tip tax would result in a $150 billion to $250 billion shortfall in federal revenue over the next decade.
In addition to the hit to government revenue, some economists believe tax-free tips will not be effective in achieving the goal of reducing the tax burden on low-income Americans.
“The policy goal is to reduce the tax burden on low-income workers,” said Ernie Tedeschi, director of economics at Yale University. Budget Labtold CNBC in June after Trump initially floated the idea. “This is not a targeted, effective approach.”
He noted that only a small portion of the low-wage workforce holds tipped jobs, and many of those workers are younger or don’t pay income taxes because they earn less.
He also believes the policy could create a class system for low-wage jobs, with only some workers receiving the benefits of tax-free income. He said a tiered approach could force employers to try to game the system, such as encouraging more tips instead of higher wages.
“What would the economy look like if we heavily incentivized tipping?” Tedeschi said. “I have to imagine that smart tax lawyers and accountants who just spend a little time thinking about this will come up with some really smart ways to take advantage of this.”
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