Last month, former President Donald Trump made a shiny promise to voters in Las Vegas, Nevada, home of one of the nation’s most prominent concentrations of service industry workers. He said he would eliminate taxes on tips.
Union Twitter Account Goes Rogue After President Speaks at RNC
“For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips,” Trump said. “We’re going to do that right away first thing in office because it’s been a point of contention for years and years and years, and you do a great job of service.”
As the Republican National Convention takes place in Milwaukee, Wisconsin , this week, Trump’s vow to eliminate taxes on tips has been a prominent part of the GOP’s pitch to voters. It’s included in the official 2024 RNC policy platform , bartenders and other staff have been spotted wearing “No Tax on Tips” shirts at RNC events, and speakers like Rep. Steve Scalise (R-La.) have endorsed the proposal on the RNC stage. Proposed legislation has already been brought to Congress by Sen. Ted Cruz (R-Texas).
It’s an attractive campaign promise, but many service industry workers and advocates feel that the elimination of taxes on tipped wages would amount to an insufficient, short-term gain for employees who have long been calling for widespread reform to the service industry’s wage model. That’s if it even becomes a reality. They’ve been burned by the pledges of ambitious politicians before, they haven’t forgotten how Trump favored the ultra-wealthy over the working class while he was in office, and are frustrated Democrats — historically the supposed allied of unions and service industry workers — are not pushing to own labor issues in the 2024 cycle.
As it stands, the Internal Revenue Service (IRS) treats tips as taxable income. The prospect of taking home more cash with each paycheck is incredibly attractive, but the reality is that vast swaths of tipped workers already pay little to no federal income taxes. According to the Bureau of Labor Statistics , about half of waiters and waitresses in the United States make less than $32,000 in annual wages and tips, and seventy-five percent make less than $42,000.
“What people really need and want is higher wages that allow them to deal with the everyday cost of living and the everyday bills they have to deal with,” Saru Jayaraman, President of One Fair Wage, tells Rolling Stone. “It’s a nice campaign tool to pander to people, but it won’t actually solve the problems that most people have.”
The tipping system has long been an insufficient contrivance that allows companies to underpay workers. It sucks, and has only gotten worse as the ever-expanding gig-economy increasingly forces workers to rely on tips rather than base pay for services to make a livable income. The federal tipped minimum wage has remained stagnant at $2.13 an hour for decades, and 43 states have a tipped wage lower than the state’s minimum wage. Tipped income can vary widely by season, and service industry employees may often be forced to overlook harassment , discrimination , and other inappropriate behavior by customers in service of their ability to make ends meet.
“Post-pandemic tips are generally down, there’s tip exhaustion generally across the economy, and people are not tipping as much as they used to,” Jayaraman adds. “If there’s a hurricane, if there’s a tornado, if it’s too hot, if it’s too cold — people just don’t come out to eat. And you’re there getting your sub-minimum wage, regardless of how many people show up. So it is so much more unpredictable now than it’s ever been.”
There’s also some concern that a massive publicity campaign and legislative push around eliminating taxes on tips will lead to a public misconception that service workers have been granted a large increase in their wages, further fueling consumer reluctance to tip employees.
Trump Site Launches Limited-Edition Assassination Attempt Sneakers
“We’ve been shouting from the rooftops for, honestly, decades, but particularly this year, this is a population that could and would turn out to vote if their top priority was campaigned on, and put on the ballot — which is their ability to raise to pay their bills and feed their families,” Jayaraman adds. “It’s their wages, by far, that is the top issue.”
Jayaraman notes that millions of service industry workers left the profession during and after the pandemic in search of more stable incomes.
For many advocates, Trump’s deafness to the pleas of industry workers during his presidency did not go unnoticed. “I was a tip earner. My parents were tip earners. We’ve been in this thing for 30 years fighting on this,” says Ted Pappageorge, Secretary-Treasurer for the Las Vegas Culinary Union, which represents one of the largest concentrations of service workers in the country . “Trump’s been missing in action on all of this. As a president, he did nothing about this, and when he wasn’t president — the last four years — nothing. So when politicians started throwing around promises out here in Vegas, out here at Sunset Park, our members are pretty skeptical.”
Pappageorge adds that the Las Vegas Culinary Union is supportive of the legislation proposed by Sen. Cruz as a “starting point” for larger reforms around service industry compensation: “Whether it’s Democratic administrations or Republican administrations, they’ve really not reached out to tip workers in this way. So we think it’s great that Republicans are running with this in some sort of fashion. Is it more than just a talking point? Let’s see. I would challenge Republicans to do something and make it happen.”
Union and labor support has been a pivotal issue in the 2024 election cycle. Biden made history as the first sitting president to join a union picket line in September and secured the endorsement of the United Auto Workers (UAW) in January. Trump, whose economic policy is best remembered for his massive tax cuts to corporations and billionaires, has been working to make up ground with blue-collar voters. In a move that shocked Democrats and other union leaders, Teamsters President Sean O’Brien delivered a primetime speech at the RNC in which he blasted corporations and the wealthy ruling class. The next day, Bloomberg published an interview with Trump in which he said he wants to slash the corporate tax rate to 15 percent.
O’Brien’s speech drew ire from some members of the Teamsters, the union’s own X account blasted O’Brien in a now-deleted post. “The message this sends to Teamsters of color, Teamster women, and LGBTQ Teamsters is that they are not welcome in the union unless they surrender their identity to a new kind of anti-woke unionism. You don’t unite a diverse working class by scoffing at its diversity,” they wrote.
O’Brien later admitted in an interview with CNN that Biden is “definitely the most pro-labor president we’ve ever had.”
Others agree. Biden is “the best president we’ve seen in our lifetime when it comes to working-class issues,” Pappageorge told Rolling Stone. “But at the end of the day, this election, we think, is going to turn on those issues […] Democrats own the issue of protecting our freedoms, protecting democracy and a woman’s right to choose. When it comes to the issues of the economy, it’s up for grabs, and we think Democrats should own those issues, and they need to get moving.”
Move Over 'Unity,' Hello '1776'
Most Popular
Comments / 0