It started with one of Donald Trump’s whims: exempting tip income from federal taxes. As is often the case with his “policy” proposals, this one seems like one of those things that often pop into his head that he promptly blurts out because they sound good. He claims he got the idea from a waitress in Nevada, who said it would win her vote.
Unlike many of his proposals, though, this one was quickly copied by Kamala Harris. Usually “bipartisan” is a cover for either some imperial venture or austerity scheme, but in this case, it’s just loopy and sensationalist. Not coincidentally, both endorsements came in Nevada, whose casinos employ lots of waitstaff, a rich source of votes.
Doubtless servers need some economic help. The Bureau of Labor Statistics (BLS) reports that their annual earnings are just under $32,000, putting them a third below the national average. Under current federal law, employers are required to pay tipped workers a minimum wage of $2.13 an hour, less than a third the current federal minimum of $7.25 and about where the overall federal minimum was in 1975. State minimum wages are often higher; Nevada has eliminated the tipped subminimum.
While servers account for much of the tipped worker population, they’re not the only ones — hairdressers are another. But add them all together and you still get a tiny sliver of employment. The Yale Budget Lab estimates that there were four million tipped workers, 2.5% of total employment, in 2023. They’re a minority even among the low-waged — just 5% of the lowest paid quarter of the workforce. And a third earn so little that they’re already not paying any income tax. (They mostly pay Social Security and Medicare taxes, though; in 2021, 43% of taxpayers paid income tax, compared with 75% for Social Security taxes.)
Trump apparently would also excuse tipped workers from Social Security taxes (details are never his strong point), but Harris wouldn’t. If they were,…
La suite est à lire sur: jacobin.com
Auteur: Doug Henwood
