The economists out there who weigh in on such things are saying that the proposals from Donald Trump and Kamala Harris to eliminate the tax on tip income won’t help all that many people.
The Budget Lab at Yale University pegs the number of people who work in the so-called tipped occupations at 4 million, or about 2.5 percent of the U.S. workforce.
Of this group, just 37 percent make enough money to pay federal income taxes, according to the Budget Lab, so, we’re talking, in rough numbers, 1.5 million workers, less than 1 percent of the overall workforce.
Which makes the dueling proposals from Trump and Harris “good politics, but bad policy,” in the words of Erica York, senior economist and research director at the Tax Foundation, a conservative think tank.
So, why is this another front in the 2024 campaign?
It’s all about Nevada being a swing state because of our stupid Electoral College system, and the Nevada chapter of the Culinary Workers Union holding outsized political sway as a result.
Trump floated his no-tax-on-tips proposal to the CWU folks first, back in June, with an open-ended promise to support the idea if he were to be elected in November.
Harris followed up with her own proposal that she rolled out at a campaign rally in Nevada over the weekend, with evidence of actual thought put to it, including a proviso to ensure that high-wage earners like hedge-fund managers and lawyers wouldn’t be able to restructure their compensation to try to take advantage.
In the midst of the back-and-forth, U.S. Sen. Ted Cruz, R-Texas, introduced legislation to address the issue that quickly picked up support from the two Nevada Democrats in the U.S. Senate, Jacky Rosen and Catherine Cortez Masto.
You can guess that Trump isn’t happy that Cruz seems to be trying to steal his thunder on this.
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