WASHINGTON (NEXSTAR) — Building on an issue from the campaign trail, Rep. Steven Horsford (D-Nev.) is the latest member of Congress to propose a bill eliminating taxes on tips.
Both former President Donald Trump and Vice President Kamala Harris have spoken in support of eliminating taxes on tips. Following Trump’s endorsement, Republican lawmakers have proposed three bills to remove taxes for tipped income.
Horsford, a Democrat, added a fourth.
His proposal, though, is different, he said. It would cap the income for people eligible for no taxes on tips at $112,500, according to the language of the bill. It would also remove the lower $2.13 minimum wage for tipped workers, bringing them up to the federal minimum wage.
“Two thirds of tipped workers don’t even earn enough to pay federal income tax,” said Sary Jayaraman, the President of One Fair Wage. “It would be nice not to be taxed on tips, but the priority is earning enough to even be able to pay taxes at all.”
Trump has taken credit for the national discussion about taxes on tips, and said Harris copied his idea.
“She said no tax on tips. I said, I just said that,” Trump said.
Horsford said the credit doesn’t belong to any politician. Instead, he said, it belongs to the workers advocating for no taxes and a fair wage for restaurant workers.
Tax policy experts estimate exempting tipped income would add up to $150-250 billion over 10 years. Trump has not indicated how he would offset the revenue.
“Ask Donald Trump, does he have a pay-for for his tax cuts to the 1%,” Horsford said. “Once he gives you an answer, then I’ll talk to you about your question.”
Horsford said he would work with the Republicans who have proposed eliminating taxes on tips, if they agreed to also eliminate the subminimum wage for tipped workers.
