Harris Backs Not Taxing Tips

[applegrove]

Harris Backs Not Taxing Tips

August 10, 2024 at 10:17 pm EDT By Taegan Goddard 128 Comments

https://politicalwire.com/2024/08/10/harris-backs-not-taxing-tips/

"SNIP............

Kamala Harris said at a rally that as president she would support making tipped income tax-free, a major issue in Nevada, where much of the economy is service-based, the New York Times reports

It’s a proposal that has already been floated by her Republican opponent, Donald Trump.

..........SNIP"

[blm]

1. Then how do they qualify for Social Security

[MarineCombatEngineer]

4. Besides their tips, they also have a base salary,

which is taxed.

[dsc]

8. But it is crazy low

the tipped minimum wage is like $2.15 an hour. Assuming a 2000 hour year that would be $4300 a year. The SS for that would be microscopic.

[MarineCombatEngineer]

9. I agree, and the base pay needs to change. nt

[dsc]

11. I thinking tipping should really be eliminated

and the waitstaff paid reasonable wages. Yes, prices would increase, but we should pay for what we use.

[MarineCombatEngineer]

12. That's a great idea, I wouldn't mind paying more if it benefits the workers. nt

[MadameButterfly]

22. You wouldn't necessarily pay more.

you'd just pay it in the price of the food at a restaurant instead of cheaper food plus tip. The only people paying more are the ones who don't tip.

[MichMan]

24. What if that means servers made less money than they do now?

[slightlv]

25. I think this is going to one of the things that

brings changes to the SS system in the future. That, and the was the CPI is correlated for us older folks. I'm not one that's particular happy about change... takes me a bit of time to adjust. But even I recognize the SS system needs some changes so a lot of people are not left out or left at the lower end of the scale when they retire. I had to take early retirement and (because I could walk across the expanse of a 6' room without falling) no SS disability. Although I realize it'll take me further on down the road, the hit I took to my monthly check is significant. I think that's another one of those things that's going to have to change. Like I said in the past about other things, not everybody fits neatly into the carved out boxes they put us in.

[edisdead]

26. Well you have ti live long enough to get to SS.

[Ms. Toad]

13. They qualify based on their non-tip income -

Which means they will be more likely than other workers with similar actual income to be forced to continue working to supplement a much lower SS payment.

[MadameButterfly]

23. This is a big downside to not taxing tips

and I'm not sure what the upside is. i'm sure service workers wi=ould enjoy lower taxes until the SS checks start coming. But I wonder why one group should not pay taxes on all their income. I'd like a tax break too.

Perhaps the problem is how do you keep accurate records of tip income. Likely it's near impossible to make people declare it anyway.

[moonscape]

2. That really surprised me.

[global1]

3. Mr. Yesterday's News Will Use That Against Her...

He'll say she stealing his idea.

[Demobrat]

5. He's already said it.

As if he would actually come through. She will.

[rampartd]

17. i think trump might keep this problem.

the recent supreme decision legalizing "gratuities." means that trump, kushner and the gang count on receiving a lot of "gratuities."

[Demobrat]

19. It wouldn't be hard to limit the law to certain types of

service industry jobs, and put a cap on it. Most people who rely on tips don’t report them all or pay taxes anyway. I know a few who did that and ended up with very little SS in their later years. If we are not going to collect taxes on tips we need to make it easier to save for retirement in other ways.

[rampartd]

30. it mught not be hard to limit the law

if we don't win it will be impossible.

as a former bartender i whole heartedly endorse the idea, and the limit, a very low limit

[blogslug]

7. He already did

I'm not linking to it

[GoodRaisin]

29. And she could mention the possibility he's lying.

Last edited Sun Aug 11, 2024, 03:36 AM - Edit history (1)

Because everything that comes out of his mouth is a lie.

[RussBLib]

6. just don't allow any loopholes

...like allowing hedge fund managers to reclassify their fees as "tips" so they wouldn't pay any taxes on fees they used to pay taxes on, to use the example most-often given in opposition to the idea.

https://russblib.blogspot.com

[RidinWithHarris]

10. That's fine, as long as, unlike Trump's version, it doesn't become a trick for the rich to evade taxes

There must be a limit on how much income can escape taxation this way, and a clear definition of what counts as a "tip" so that massive fees to the likes of hedge fund managers don't apply.

[Ms. Toad]

14. That disappoints me.

It is unfair to other workers with similar actual income who pay taxes on their full income, and it will lead to much lower social security income for these individuals when they retire . . . if they are even able to retire on the pittance they will be receiving.

Wage and labor laws need to be reformed to ensure that all workers receive a living wage. Creating a one-off solution for one group of workers makes that less likely.

[NYC Liberal]

15. Trump doesn't support this to help people in the service industry.

He wants rich people to be able to move money around without paying taxes by calling it "tips"

[Klarkashton]

16. In civilized countries workers don't need tips to make

A living wage.
In this country there is an implied tax of 20% or more to pay this additional wage. It's become this way at donut shops.

[Demobrat]

20. It's everywhere.

We are expected to pay the employees of every business we walk into. It’s a terrible system that doesn’t work for anyone.

[Klarkashton]

21. They have raised the prices anyway.

On top of the expected 20%.

[usonian]

18. DON'T SAY THAT OUT LOUD

Next, we’ll see Musk and Bezos working for $1/year salary and a billion in tips.

Cheaters will find a way.

[pat_k]

27. Perhaps ease tax burden by adding a "tips" deduction. . .

. . . where you can deduct tips up to a maximum of $10,000 or something.

Then it still counts as income for purposes of social security. You're just getting a deduction to ease the tax burden. Think of it as akin to deducting half your self-employment tax to ease the self-employment tax burden.

[BannonsLiver]

28. If it helps her win Nevada I'm all for it.

I think people in service industries see this as a more likely outcome than changing American tipping culture in one election.

Most consumers would rather not subsidize pay for service industry workers through tips. Many in the service industry I assume would like the stability of a livable hourly wage. Yet there’s been no meaningful move in that direction whatsoever in the last decade when this issue started to percolate.

So I could see how someone in the industry would see this as more viable in the near future and would support it.