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NextImg:Why Trump’s favorite new tax plan might not win over any new voters - Washington Examiner

Donald Trump’s promise to implement no taxes on tips, an idea the former president said was inspired by a server at his Trump International Hotel in Las Vegas, is unlikely to benefit the majority of lower-class people.

Following Trump’s proposal for no tax on tips, Sen. Ted Cruz (R-TX) introduced a new bill that would eliminate federal income taxes on tips. House Republicans introduced a separate bill that would not allow tips to be “subject to income or employment taxes.”

“American workers in dozens of industries depend on tipped wages to support themselves,” Cruz said in the press release announcing the Senate bill. “This legislation is a common-sense pro-worker bill that will help families deal with the historic inflation caused by the Biden administration.”

However, the vast majority of workers in the United States workforce receive tips, according to the Center For American Progress. The organization found that Cruz’s bill “leaves out more than 95 percent of low- and moderate-wage workers.”

One Fair Wage, an advocacy group for tipped workers, working with the Food Labor Research Center at the University of California, Berkeley, found that nearly half of restaurant workers who rely on tips earn less than $13,850, which is the threshold needed to pay for income tax.

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“Many of these workers make so little that they will not come close to paying federal income tax under current law and thus would not benefit at all from Trump’s proposal,” Howard Gleckman, a senior fellow at the Tax Policy Center, said in a statement

Another issue is how exempting taxes on tips would affect a worker’s collection of Social Security benefits down the line. “No tax payments, no benefits,” Gleckman wrote.