By james art 
President Trump at a rally on Saturday has promised to fulfill his election promise to remove taxes on tip.
“In the coming weeks, I will work with a congress to receive a bill on our desk, which reduces taxes for workers, families, small business and, which is very important, keeps its promise,” Trump said. “We will take it for you – no taxis tax.”
The president, speaking at a casino in Las Vegas, said the tax reduction was at the height of his legislative program for this new congress.
“If you are a worker at a restaurant, waiter, maid, picolo, bartender, one of my cadiums,” said the president, “Your tip will be 100% yours.”
Trump’s comments came in a 40-minute speech over the weekend, which sounded more like a winning tour than a political plan. The president shook a list of the changes he made and proudly said that he had already taken “almost 350 executives to turn the terrible failures and betrayal” he inherited. Trump has issued dozens of executive orders, actions and memorandums after taking office last Monday.
Trump first stated the idea of ”No Taxes on Bakshi” in the same city last June during a pre -election rally. “When I go into office, we will not charge taxes on the tip, on the people who give tip,” Trump said then, promising that he would do it “immediately, the first thing in the post.”
The four -word slogan was glued to billboards and Candidate for President of the Democratic Party Kamala Harris presented a similar version of the idea. He was so popular with the subgroup of voters that Trump attributed him to helping him win the key state of Nevada in the presidential election.
The president cannot unilaterally change the tax code. But much of Trump’s widespread tax law from 2017 expires at the end of 2025, and this will allow Congress to change the existing tax policy.
Earlier this month, the two senators Democrats of Nevada joined forces with a group of Republicans to re-introduce legislation This would release tips from federal income taxes. “This is something that can attract more people to the workforce at the restaurant. We are an industry with a chronic shortage of staff, “said Sean Kennedy of the National Restaurant Association that approved the bill.
But even if this idea of ”no taxes on tip” has some support from the industry and some political support from two parties, tax experts and economists do not like it.
“I think this is actually a terrible policy,” said Heidi Shirholz, President of the Institute for Economic Policy and Economist in Labor in the Obama Administration. “If you really want to help workers with a tip, do it directly by raising the federal minimum wage and gradually eliminating the minimum wage with a tip.”
She says she is concerned that this policy may delay the inertia for reviewing the minimum wage of a tip.
The federal minimum wage for workers is $ 2.13, although some states have set higher value.
“There is no real economic benefit of the idea,” Bill Gail, a judge of Urban-Brookings tax policy and an economist in the George H. W. Bush administration. “This is not a good way to help low-income workers, because the majority of low-income workers do not get tips.” This is Alex Muressianu, a senior analyst at Tax Foundation.
“Why a waiter who earns much of his tips should get a very big tax reduction, and the cashier who earns little or nothing from the tip, why should he not get a tax reduction?” He said.
According to Budget Laboratory at Yale UniversityA huge majority (over 90%) of the hourly low -income workers do not receive a tip.
And so Muressianu, Gail and Shirkoltz claim that creating separation only for workers who give tips can open the system for more abuses in which people with high incomes re -classify their incomes as bakki. Gail also said that this would do the tax code “more complex”.
“And to do that at the same time, you know, they are trying to reduce IRS funding is just another example of why it’s a bad idea,” he added.
Then there is the issue of missed revenue. The Committee on Responsible Federal Budget ratings that the removal of tips from federal taxes on income and salaries can reduce revenue by $ 150 billion to $ 250 billion in 10 years.
Despite experts’ fears, the idea remains politically popular.
“I would say that economists have never worked for $ 2.13 an hour, so I don’t listen much to what they say,” Ted Papageorge said of Nevada’s culinary union in response to the fears expressed by experts.
Pappageorge said the union, who represents about 60,000 hospitality workers in the state, welcomes the idea of removing taxes on tip.
“That has to happen,” he said, adding in the same breath that he also wants to see an increase in the minimum wage for workers with tips.
“The reality is that both are useful. And we challenge President Trump, Republicans and Democrats to do both, “saying that it evaluates the idea of eliminating taxes on tip, but will also continue to fight for the other problem.
“This idea for $ 2.13 an hour is just indecent,” he said. – It really is.
And so he will make changes to the policy he can get so far. Because, he says, the lack of taxes on tip helps reduce the cost of living for working families who need immediate relief.
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