A Democratic Congressman is looking to ensure that tips will become tax-free and is pushing his own plan to bring around this change
One of President Donald Trump’s promises was to end taxation on tips, which arguably won him the praise of tipped workers all over the country, particularly in Nevada. However, Democratic Congressman Steven Horsford is pushing for his version of how this should happen.
Time to End Taxes on Tipped Income, with Casino Workers as Focus
Horsford wants to eliminate the sub-minimum wage, which, in some instances, sees workers paying $2.13 an hour in some of the worst scenarios. Employers justify this by arguing that tips make up for the rest of their income which appears cruel on the face of it, and it largely is according to the Democrat.
Addressing a roundtable at the Culinary Training Center, following similar comments last week, Horsford did not mince his words and signalled that he would fight tooth and nail to make this happen. He argued that it was ultimately people who mattered and not some “special interests in Washington.”
His legislative push is multi-pronged and it will not simply seek to end taxes on tipped income, which is something that those in the hospitality industry are particularly keen on seeing come to pass.
Horsford is perfectly aware that bad actors may try to abuse this new break, and that is why his bill is also seeking to define who can be classified as a tipped worker. The tax benefit cannot exceed $112,000, the bill also adds, and social security taxes will be applied to tipped income regardless of what other taxes may be removed.
Horsford is also aware that he comes from the weaker political aisle in this election cycle, with his party ceding control of both the Senate and the House and therefore making his bill a much tougher sale.
Tipped Workers Matter and Common Concerns
However, he also believes that there would be sufficient momentum to push through as President Trump promised that he would act on taxes that target tipped income.
To raise the bill’s odds, Horsford is working with Representative Vern Buchanan, who is a Republican from Florida. Horsford’s legislative efforts are far more encompassing and have accounted for how this change could impact proof-of-income on mortgage applications, for example, as well as whether the new tax would not result in a huge loss for local and federal governments.
Horsford has had one clear message to send to the people at the Culinary Training Center – “you matter,” and urged them to call their senator and urged them to get on board with the TIPS Act.
