Lawmakers Propose Ending Taxes on Tips

Reps. Matt Gaetz (R-FL) and Thomas Massie (R-KY) have introduced a new bill to get rid of taxes on tips. They want to help workers in the service industry keep more of their money. This new bill is called the Tax Free Tips Act. Rep. Marjorie Taylor Greene (R-GA) is also supporting this bill.

The idea for this bill came from a suggestion by former President Donald Trump during a rally in Las Vegas, Nevada. Trump said he wanted to stop taxing tips for hotel workers and other service industry employees.

Gaetz explained that getting rid of taxes on tips would help workers deal with the high cost of living, which has gone up a lot recently. He said, “With prices rising, service industry workers, many of whom might be working two jobs, need to keep every dollar they earn in tips.”

Massie added that taxing tips is unfair because it hurts people who earn less money. He mentioned that former Rep. Ron Paul (R-TX) had tried to pass a similar law in 2011. Massie said, “With digital payments, the government can tax every transaction. It’s time to stop taxing tips and help working people”.

Right now, the IRS makes workers report their tips to their employer every month if they get more than $20 in tips. Many parts of Trump’s tax cuts will end next year, and getting rid of taxes on tips might be part of future tax plans.

During a recent visit to Capitol Hill, Trump shared how he got the idea to stop taxing tips. He said a waitress told him how hard it was to keep track of tips and the big penalties for mistakes. Trump asked her, “Why are we even taxing tips?”

Sen. Cynthia Lummis (R-WY) said Trump listens to and respects working Americans. Conservatives agree with Trump’s idea to stop taxing tips. Rep. Byron Donalds (R-FL), who used to be a waiter, said, “Waiters and waitresses work hard and they’re not rich. It doesn’t make sense to tax their tips.”

Sen. Kevin Cramer (R-ND) said that the tips issue is good for Trump and Republicans because it appeals to working-class voters. Rep. Tim Burchett (R-TN) added that people would spend their tips in the economy instead of saving them, which would help everyone.