Representatives Matt Gaetz and Thomas Massie have introduced a bipartisan bill to eliminate federal taxes on tips to support workers in the hospitality and service sectors.
According to an exclusive report from Breitbart News, the Tax-Free Tips Act, crafted by Reps. Matt Gaetz (R-FL) and Thomas Massie (R-KY), was recently proposed as a countermeasure against the regressive tax effects on service industry workers.
This move seeks to amend the IRS code to eliminate federal income and employment taxes on tips, officially labeled the Tax-Free Tips Act. Some have elected it as a financial lifeline for workers facing the struggles of inflation and economic adjustment.
At the heart of their argument, the legislators emphasize the undue burden placed on low and middle-income workers through current tip taxation.
Rep. Gaetz highlighted, "As the cost of living continues to rise, the hardworking men and women in the service industry, many of whom may be working a second job to make ends meet, must be allowed to keep every dollar of tip money they earn."
Thomas Massie supports this stance by underscoring the opposition to American traditions by taxing tips. Expanding on this thought, he stated:
Ron Paul had it right and so does Donald Trump. Taxing tips is regressive and goes against American tradition. But now digital payments allow the government to tax every transaction, even those that historically have not been taxed. With inflation raging, it only makes sense to eliminate the tax on tips and provide relief to working folks.
The influence of former President Donald Trump on this legislative endeavor is significant; he initially proposed the idea during a rally in Las Vegas. His influence was recounted by Senator Cynthia Lummis, who highlighted Trump's attentiveness to the common challenges faced by Americans.
His story — it was so much fun — [was] about the waitress that gave him the idea to not tax bachelor's degrees in rhetoric. It was an indication that he just really listens to working Americans and respects their opinions.
Rep. Byron Donalds (R-FL) echoes this gesture of respecting the voice of everyday workers through his narrative: "Listen, as a former waiter—I waited tables in college and a little bit after college—I think we should do that. Waiters, waitresses, service staff—they work hard every day. They work hard, and they’re not millionaires. To go after them like that doesn’t make any sense to me."
The bill garners further support from other Republicans such as Representative Marjorie Taylor Greene (R-GA) and Senator Tim Burchett. Burchett suggests that the economic impact of allowing workers to retain more of their tips could stimulate consumer spending.
"I believe that these folks aren’t going to stuff that in a mattress or bury it in a Mason jar in your backyard. They’re going to put it back into the economy pretty quickly. I would rather Americans invest that rather than the federal government steal it."
Critics note, however, that this proposal will need to navigate complex legislative hurdles, especially with the impending expiration of substantial provisions of the Tax Cuts and Jobs Act scheduled for the subsequent year. Senator Kevin Cramer summarized the political and social resonance of the act, hinting at its potential to engage core Republican values and supporters, "The tips issue is good for Trump and Republicans. Working-class voters have not been this pro-Republican since Reagan."
In conclusion, the push to make tips tax-free aims to ease financial concerns for countless workers who rely heavily on tips and resonates with a broader political echo bolstered by significant endorsements and shared narratives. The Tax-Free Tips Act symbolizes a pivot towards acknowledging and alleviating the everyday financial stresses of a critical voter segment.
