The Origins of Trump’s Proposal
In Donald J. Trump’s account, the inspiration for exempting tips from taxes came during a dinner at his Las Vegas hotel. A waitress shared her frustration about the tax burden on her tips, sparking Trump’s pledge of “No taxes on tips!”
Political Embrace and Rapid Adoption
What began as a rally promise has gained significant traction. The Republican Party has officially incorporated the proposal into its platform. House Speaker Mike Johnson has expressed intentions to swiftly push the idea forward. Notably, even some Democrats are showing support, with Nevada’s senators endorsing the tax exemption for tipped income.
Impromptu Economic Policy
The sudden popularity of this initiative underscores the ad-hoc nature of economic decision-making under the Trump administration. Economists who advised the campaign were caught off guard by the proposal’s emergence. However, Republicans view it as a strategic move to appeal to working-class voters in the ongoing campaign against President Biden.
Trump’s Call to Action
Encouraging his supporters to spread the word, Trump has suggested leaving notes on restaurant bills informing staff that a Trump victory would mean no taxes on tips. Approximately four million Americans are employed in roles where tips play a significant role, as estimated by the Budget Lab at Yale.
Political Strategizing
Stephen Moore, a Trump economic adviser, acknowledged the unconventional origins of the idea, highlighting its political appeal. He stated, “It’s not like a gang of economists sitting around a table came up with that.” Despite initial surprise, the proposal is seen as a politically advantageous move.
