Vice President Harris blindsided Democratic lawmakers and progressive activists by endorsing a proposal first floated by former President Trump to exempt tips for service and hospitality workers from taxes, an idea Democrats had previously criticized as “bogus” and a “ploy” for votes.
Harris’s support for the idea is being seen as an aggressive play for votes in Nevada, a critical swing state where service workers will be key, and as an effort to neutralize whatever advantage Trump may have gained by first floating the idea during meetings with GOP lawmakers on Capitol Hill in June.
But key Democratic lawmakers and progressive activists have raised serious concerns about the substance of the proposal to shield tipped income from taxation, worrying it would leave out many lower- and middle-income workers who are just as deserving of tax relief but don’t work for tips.
Policy experts also question how such a proposal could be drafted without having major impacts on economic behavior, potentially costing the federal government much more than the $100 billion to $200 billion it is currently projected to add to the national debt over the next 10 years.
Another criticism from the left is that employers could use tax-free tips as an excuse not to raise base-level wages and could even prompt some businesses to become more aggressive in soliciting tips from customers in lieu of raising workers’ hourly pay.
Read more at Thehill.com
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