Mon. Jul 15th, 2024

Trump wants to end tip taxes, a low priority for restaurant workers

By 37ci3 Jun22,2024

Donald Trump wants to eliminate taxes on tips, hoping to strengthen support among service members. Some are not affected.

“The call to end taxes on recommendations is the wrong way to try to solve the problem of uplifting the underclass,” said Elyanna Calle, 21, a manager and bartender at Beer Factory, an Austin-based vegan restaurant. Organizer for Restaurant Workers United, a local labor group.

The policy debate is in the middle solid salary and recruiting gains for blue-collar and part-time workers, even as the higher cost of living weigh the householdetc‘ financial and economic perspectives.

Elyanna Calle smiles for a portrait
Elyanna Calle.Courtesy Anjelica Calle

While the hospitality industry continues to add jobs, there are many hotels, bars and restaurants putting on the brakes to hire and pay whom more consumers are squeezed their outgoing budgets. That has fueled calls from labor advocates to strengthen the livelihoods of service workers in a hotly contested election year.

“Trump and the Republicans are celebrating query showing The absolute main problem for our population — and frankly, most of the population at this time — is the rise of subsistence and living wage jobs,” said Saru Jayaraman, president of the advocacy group One Fair Wage and director of the Food Labor Research Center at the University of California, Berkeley. “Democrats have a little We wish you to be more careful.”

However, he said, “Getting rid of tip tax gives workers a nice little bonus once a year, but obviously not much. What they need, every day of the year, is something they’re struggling to pay the rent.”

“It’s not just a wrong solution, it’s a bogus solution,” Jayaraman said.

Trump did not elaborate on the idea, which requires congressional approval. But speaking at a rally in Nevada this month — a state with the largest concentration of working-class workers in the country — the presumptive 2024 GOP nominee vowed to prioritize “first thing in office” politics.

Restaurant Workers United, a grassroots labor group, has demanded higher hourly wages for servers, bartenders and others.
Restaurant Workers United, a grassroots labor group, has demanded higher hourly wages for servers, bartenders and others.Courtesy of Elyanna Calle

Four Republican senators on Thursday presented the billBacked by the National Restaurant Association, it would allow taxpayers to deduct 100% of earnings from tips.

Final analysis The nonpartisan Committee on a Responsible Federal Budget found that such a move would reduce federal revenue by $150 billion to $250 billion over a decade. Some Republicans pointed to the impact of a potential deficit He expressed skepticism about Trump’s proposal, though others rallied behind it. At least one prominent Democrat running for re-election, Senator Jackie Rosen of Nevada, has also supported tax cuts for high-income earners.

If the real issue is that employers are not paying, the focus will often be on the advice culture [enough] for labor.

Elyanna Calle, Austin, TX.

Some workers and labor groups say they would prefer an increase in base pay to a tax break on tips.

Calle said he left his previous employer, an Austin pizzeria, after efforts by workers to unionize and demand higher wages. He and over 100 others RWU members it has since evolved into an advocacy group that advises other service members who want to organize.

“If the real issue is that employers don’t pay,” Calle said, “often the focus will be on the culture of counseling.” [enough] for labor.”

Many consumers agree, but far from the majority. One recent Bankrate survey, 37% of respondents said employers should pay better so employees rely less on tips; only 11% said they would be willing to pay more to avoid tipping at all.

At least 25 states have raised or will raise the minimum wage this year, with major cities like New York and Chicago requires full minimum wage for those who earn tips. Many places have both a minimum wage and a lower “sub-minimum” for those earning tips, where awards are expected to make up the difference between the two.

In Texas, the minimum is $2.13 an hour, with employers only required to pay the balance when tips do not reach the federal hourly wage of $7.25.

However, Calle was sympathetic to restaurant operators who opposed higher wage demands. “I’ve seen both sides,” he said, referring to small businesses where small profit margins “make it really difficult to pay workers.”

Tax discussions will intensify. The November election will determine the fate of the tax cuts Republicans passed along party lines in 2017, most of which expire next year. The key factor is the corporate tax rateIt was permanently lowered from 35% to 21%, though Democrats floated the idea of ​​raising it again.

“They’re very happy to get rid of taxes from corporations and they’re very happy to let customers pay their workers,” Jayaraman said of lawmakers who oppose raising the minimum wage but support repealing the taxes.

“Every time we try to raise wages,” he added, “we hear bad employers say things like, ‘Well, these lazy workers, they don’t even pay tax on tips.’

“Restaurant operators and tip workers receive extensive training on how and why to report tips,” said Aaron Frazier, vice president of public policy for the National Restaurant Association. “Because of this effort, counseling reports have improved significantly over the past 30 years.”

Heather Clark, 37, who tends bar for $10 an hour on weekends at Shigs in the Pit in Fort Wayne, Indiana, said “hell yes” to the idea of ​​ending tip taxes.

“I would come home with better checks. On average, I’ll work two to three shifts every two weeks and the take home check will be $200 to $300 when it’s $600,” he said, partly faulting the shift away from cash by customers over the past decade.

But it will take longer for Clark, a registered independent, to endorse Trump. “There are a lot of other things that overshadow the fact that he never won my vote,” he said.

Megan Cohen, 40, a server at an upscale Middle Eastern restaurant in the Los Angeles area, also said she would welcome a lower tax bill, but not in exchange for support at the ballot box.

“I’m absolutely not going to pay taxes, that’s fine,” he said, but added: “There’s nothing that’s going to make me vote for Trump.”

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