Ending Federal Taxes On Tips Difficult To Enact

August 13, 2024 4:57 am

If nothing else, former President Donald Trump and Vice President Kamala Harris agree on one thing, at least: Both say they want to eliminate federal taxes on workers’ tips. But experts say there’s a reason Congress hasn’t made that change already. It would be complicated, not to mention enormously costly to the federal government, to enact. It would encourage many highly paid workers to restructure their compensation to classify some of it as “tips” and thereby avoid taxes. And, in the end, it likely wouldn’t help millions of low-income workers. Both candidates unveiled their plans in Nevada, a state with one of the highest concentrations of tipped service workers in the country.