Former President Trump to talk about 'no tax on tips' policy
Former President Trump to talk about 'no tax on tips' policy
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00:00The Trump campaign is now showcasing its No Tax on Tips program in an event this afternoon
00:07in Las Vegas.
00:08It's an idea gaining traction on both sides of the aisle in Washington.
00:11ABC's Jay O'Brien joins me now along with Alexis again for more on this.
00:15Jay, Trump's campaign has basically accused Harris of stealing this idea of No Tax on
00:20Tips.
00:21Why has it become so popular with both campaigns?
00:24Yeah, and it's something we've seen the Harris campaign really lean into, including here
00:28at the Democratic National Convention.
00:30And one of the reasons why is because it is popular, particularly in a state like Nevada,
00:35for instance, where there are a number of service industry workers.
00:38It is correct that Trump pitched this policy first and Harris pitched a version of it.
00:43So he did come first with this policy.
00:45And we have heard some criticism, frankly, on it from both sides of the aisle.
00:49Because while it's politically expedient, because it might work in a key swing state
00:53like Nevada, there's also concerns that, you know, you would be giving a tax break
00:57to potentially some service workers, but not others.
01:00You know, people waiting tables, but not necessarily cooks in the back of the kitchen.
01:04So there's questions as to its efficacy.
01:07But in the reality, both campaigns seem to be making the calculus that it could win them
01:11votes.
01:12Alexis, there are also questions about the impact here, right?
01:14It sounds great to say, especially if you are a service worker.
01:16But what is the impact of the national on the national economy if you stop taxing tips
01:21altogether?
01:22So what we're hearing here is what will the cost be?
01:24What will the revenue lost amount to?
01:27And depending on who you look at, it could be upwards of $250 billion over 10 years.
01:33If you eliminate federal taxes from workers tips, Trump wants to go a step further and
01:38also say payroll taxes are exempt.
01:40The question becomes, where do you get that money from?
01:43And also some are saying this really does not amount to a tax cut for low and middle
01:47income workers.
01:49It's actually going to be a boost for employers, because if you're not going to tax the wages,
01:55the tips, then does the company not have to increase their base salary for these workers
02:00who rely on tips?
02:01And so they're saying that the employer could benefit from this by not then being motivated
02:07to increase their base salary.
02:08Are they motivated to do that now?
02:10Well, look, they're they're really not because the minimum wage hasn't gone up much.
02:14And the minimum wage for these workers is different because it's not the regular federal
02:19minimum wage because they are dependent on tips.
02:21That's part of their overall equation.
02:23I think a lot of economists are saying the better way to deal with this is to either
02:26raise the minimum wage, something that Harris has put her support behind, but also increasing
02:31things like the child income tax credit, the earned income tax credit, which would help
02:35a broader base of low and middle income workers, not just those reliant on tips.
02:40Interesting.
02:41J. O'Brien, Alexis Christophers.
02:42Thank you both.