Two proposals have been introduced by politicians to cut taxes on tips. One of them is from Democratic Senator Kamala Harris, who has proposed a bill called the Tip Income Protection Act. This bill aims to exclude tips from being considered as a part of the minimum wage, ensuring that tipped workers are paid at least the federal minimum wage before tips. Harris argues that this will prevent employers from taking advantage of the tipped minimum wage, which is currently as low as $2.13 per hour in some states.
On the other hand, former president Donald Trump has proposed a different approach to cutting taxes on tips. His proposal includes allowing workers to keep their tips without having to share them with their employers. This would, in essence, exempt tips from being counted as wages, thereby reducing the amount of taxes that workers pay on their tips.
Both proposals aim to address concerns about the treatment of tipped workers and ensure that they receive fair wages. However, there are differences in how they achieve this goal. Harris’s proposal focuses on ensuring that tipped workers are paid at least the minimum wage, while Trump’s proposal aims to reduce the tax burden on workers by exempting tips from being counted as wages.
Overall, both proposals seek to improve the financial situation of tipped workers and protect their earnings. Supporters of these proposals argue that they will help to alleviate financial strain on workers who rely on tips as a significant portion of their income. However, critics have raised concerns about the potential impact on businesses, particularly small restaurants and other establishments that rely on tips to offset labor costs.
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