Challenges Trump faces in fulfilling tip tax promise
Former President Donald Trump, at a rally in Nevada, promised that he would not tax tips if reelected. However, he doesn’t have the authority to change tax laws on tipped income himself; this would be the responsibility of Congress. Trump’s campaign clarified that he would request Congress to make this change. When discussing the taxation of tipped income, it’s important to understand how the process of changing tax laws operates in the United States. The President, even though a powerful figure, does not possess unilateral authority to amend or establish tax laws; this is solely the prerogative of Congress. Specifically, tax-related legislation typically originates in the House Ways and Means Committee, which is part of the U.S. House of Representatives. Once proposed, a tax bill must pass through both the House and the Senate. If successfully passed by both chambers, it then requires the President’s approval.
In the case of former President Donald Trump’s statement at a rally in Nevada, his promise to not tax tips if reelected falls into a common category of campaign promises made by presidential candidates. These promises are generally aimed at garnering support from certain voter demographics—in this case, potentially service industry workers who rely significantly on tips for their income.
However, it’s crucial for voters to realize that despite his pledge, the implementation of such a tax change falls outside the direct control of the presidency. What Trump can do, as he stated and his campaign later clarified, is use his position to advocate for this change by urging Congress to alter the legislation regarding the taxation of tipped income. This would involve negotiating with lawmakers and leveraging his office to support and promote passage of a bill to that effect.
This clarification underscores the complexities of policy-making in the U.S. government and highlights the checks and balances designed to prevent unilateral actions by any single branch of the government. Therefore, while presidential promises can indicate a leader’s priorities, they do not guarantee the realization of those promises without the cooperation and agreement of the legislative branch.
In an appeal to voters in Nevada, former President Donald Trump promised rallygoers he wouldn’t “charge taxes on tips” for those who rely on them to make money.
However, Trump, as president, wouldn’t have the power to influence taxation on tipped income. Congress would have to change the laws regarding it, and the former president’s campaign told the Washington Examiner that he would ask it to do so.
“For those hotel workers and people that get tips, you’re going to be very happy,” Trump said during his Las Vegas rally. “Because when I get to office, we are going to not charge taxes on tips.”
The former president’s campaign also blamed President Joe Biden for “aggressively” stepping “up the IRS going after tip workers.” The attack is likely in reference to a voluntary tip reporting program, the Service Industry Tip Compliance Agreement, or SITCA, in which service worker employers and the IRS collaborate.
“You do a great job of service. You take care of people. And I think it’s going to be something that really is deserved,” Trump said. “So those people that have jobs in restaurants, whatever the job may be, a tipping job, we’re not going after for taxes anymore.”
If elected to office again, Trump would have a chance to oversee congressional lawmakers rewriting tax policy when much of the former president’s tax package expires in 2025. If the GOP can maintain its majority in the House and flip the Senate, Trump could have a better chance at seeing service-tips-related legislation go through.
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Trump’s taxes-on-tipped-wages promise could appeal to Nevadan working-class voters in a state that has voted blue since Barack Obama was elected president in 2008. Some of those are Latino voters, whom Trump has been attempting to market himself to in this campaign.
The CookPoliticalReport rates Nevada as a “toss-up” state, and it would offer six electoral votes toward the winner as Trump and Biden’s rematch is coming down to a fierce battle for roughly seven states in November.
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