Why Trump wants to make tips tax-free

“We are going to not charge taxes on tips,” former President Donald Trump said last week, proposing a novel change to the tax code as he courted voters in the service industry. If tips were exempt from federal income tax, workers would theoretically get to keep more of their wages. The presumptive GOP presidential nominee also proposed eliminating payroll taxes on tips, so employers could benefit too.

Republican lawmakers have already turned the idea into legislation. Trump will need help from Congress to deliver on his campaign trail promise. Reps. Matt Gaetz from Florida and Thomas Massie from Kentucky unveiled a bill Tuesday that would make tax-free tips a reality, but not all Republicans are on board.

Even if the GOP was all on the same page and won the White House and retook the Senate in November, Democrats are likely to hold more than 40 Senate seats, which means they could deploy the filibuster to hamper the Republican agenda.

President Trump in Seoul by Trump White House Archived is licensed under flickr Public Domain Mark 1.0

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