Cash Tips Rule Everything Around Me

You’ve probably noticed tipping requests popping up everywhere, from coffee shops to self-checkouts. A recent survey has found that nearly 90% of Americans believe that tipping is out of control. Now, tipping is in the spotlight for another reason: taxes.


A new tax policy is making waves in Washington—and if you work for tips, it could mean more money in your pocket. But is this a real solution or just political theater?

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HEREBY HIGHLIGHTED

No Tax on Tips Act

This bill aims to exempt cash tips from federal income taxes. Right now, servers, bartenders, and other “tipped” workers must report tips as income and pay taxes on them—just like regular wages. Under this proposal, tipped workers could deduct the amount of cash tips received, lowering their taxable income.

The idea gained traction after Donald Trump announced it as part of his campaign strategy in Nevada, a key swing state with a large hospitality workforce. But Nevada isn’t the only state with an interest in eliminating taxes on tips. At least 20 other states have introduced similar policy proposals.

The Debate Floor

Supporters of this policy view it as a strategy to improve the economic standing of low-wage workers, while critics allege the total opposite. Here’s a breakdown of the arguments for and against “The No Tax on Tips Act”:

Those for the proposal believe:

  • It puts more money in the pockets of low-wage workers, especially in restaurants and the hospitality industry.
  • It’s a pro-worker tax break that acknowledges the financial struggles of tipped workers.
  • It could stimulate local economies as workers spend more of their earnings.

Those against the proposal believe:

  • It would only benefit a small fraction of low-wage workers, which violates the basic principle of equity—a cornerstone in tax policy.
  • It opens doors for high earners and employers to game the system, potentially getting more tax benefits than the workers this bill is meant to help.
  • It could further the national deficit, with potential costs estimated to be $150-200 billion over the next decade.


Tax policy doesn’t happen in a vacuum. When one group gets a tax break, someone else picks up the tab. If this bill passes, will it lead to wage cuts in the long run? Will it dissuade employers from implementing fair pay structures? And could this be a tactic to eliminate the IRS more than helping low-wage workers?

ZINGER

Before They Led, They Served

You may know that Alexandria Ocasio-Cortez (AOC) worked as a bartender before going into politics. She isn’t the only famous political figure who raked in tips back in the day!

  • Barack Obama waited tables and scooped ice cream at Baskin-Robbins.
  • John Boehner, the former Speaker of the House, claimed that he “grew up in a bar” to highlight his working-class origins.
  • Scott Walker – Before becoming Governor of Wisconsin, he flipped burgers at McDonald’s in high school.

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