(LibertySociety.com) – Over the last several weeks, former President Trump has said he would stop taxing tips for service workers as soon as he is back in the White House.
The idea is not new by any means but instantly took hold with the public. On June 18, Reps. Matt Gaetz, R-Fla., and Thomas Massie, R-Ky., announced the Tax Free Tips Act, to do just that. Rep. Marjorie Taylor Greene, R-Ga, hopped on board as a co-sponsor for the bill. Trump first spoke of his plan during a June 9 rally in Las Vegas, where the service industry is one of the main sources of work.
He again discussed his plan during a roundtable event with local church leaders in Detroit and during his speech at a Turning Point Action (TPA) convention. On June 22, Trump stopped at a sandwich shop in Philadelphia, where he left a $500 tip for the workers. He wrote on the receipt in all caps, “VOTE TRUMP. NO TAX ON TIP.” Workers are required to report any tips over $20 to the Internal Revenue Service (IRS), but some lawmakers have pointed out that most people put their money directly back into the economy.
Just days after Trump announced his plan, Rep. Greene posted a photo of one of her receipts showing a $120 tip and a demand to stop their taxation. A frequent Republican critic of Trump, Rep. Massie praised the former president in a statement after introducing the new legislation. He wrote that taxing tips “goes against American tradition,” and pointed out that nearly everything is taxed in today’s world due to payment digitization. He argued that unfettered inflation was reason enough to eliminate taxes on tips. North Dakota Rep. Kevin Cramer expressed his enthusiasm for the legislation and said that the Republican Party had not seen support from the working class like it is currently experiencing since President Reagan was in office.
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