Not Taxing Tips Is a Bad Idea
Servers and other tipped workers desperately need better pay. Donald Trump’s blurted-out proposal not to tax tips, now copied by Kamala Harris, isn’t the way to achieve it.

Restaurant in Southbank, London. (Grant Smith / Construction Photography / Avalon / Getty Images)
It started with one of Donald Trump’s whims: exempting tip income from federal taxes. As is often the case with his “policy” proposals, this one seems like one of those things that often pop into his head that he promptly blurts out because they sound good. He claims he got the idea from a waitress in Nevada, who said it would win her vote.
Unlike many of his proposals, though, this one was quickly copied by Kamala Harris. Usually “bipartisan” is a cover for either some imperial venture or austerity scheme, but in this case, it’s just loopy and sensationalist. Not coincidentally, both endorsements came in Nevada, whose casinos employ lots of waitstaff, a rich source of votes.
Doubtless servers need some economic help. The Bureau of Labor Statistics (BLS) reports that their annual earnings are just under $32,000, putting them a third below the national average. Under current federal law, employers are required to pay tipped workers a minimum wage of $2.13 an hour, less than a third the current federal minimum of $7.25 and about where the overall federal minimum was in 1975. State minimum wages are often higher; Nevada has eliminated the tipped subminimum.