Trump says he will eliminate taxes on tips

Former President Donald Trump said he would eliminate taxes on tipped income if he wins a second White House term, an effort to appeal to voters in the battleground state of Nevada, where he held his first rally Sunday since the historic conviction in a New York hush money trial.

“Hotel workers and people that get tips, you’re going to be very happy because when I get to office, we are going to not charge taxes on tips,” Trump said at the Las Vegas rally. “We’re going to do that right away, first thing in office.”

More than 1 in 4 private sector workers in Nevada are employed in the tip-heavy hospitality industry, according to up-to-date state figures.

The Trump campaign later acknowledged that any policy eliminating taxes on tipped earnings would require congressional approval.

But eliminating taxes on tips is not currently under consideration by the House Republicans who are crafting legislation to extend Trump’s 2017 tax cut package if he wins the White House in November.

Rather, Trump’s campaign trail promise is a reflection of Nevada’s status as a must-win state for both Democrats and Republicans.

“If we win Nevada, we win the whole thing,” Trump said on Sunday during a winding speech in extreme heat, throughout which Trump complained that his teleprompters were malfunctioning.

The rally marked Trump’s first since he was convicted May 30 of 34 felony counts related to a hush money payment to porn star Stormy Daniels ahead of the 2016 election.

Nevada has long been seen as a reliably Democratic state, in part due to the organizing power of labor unions in the state.

This year, Republicans believe they can flip Nevada in November partly due to the state’s Black and Latino populations, which polls suggest are not as solidly pro-Biden as they were in 2020.

Trump’s pledge did not get immediate buy-in from the workers he was targeting.

On the contrary, the largest union in the state called Trump’s tax-free tips plan “a wild campaign promise from a convicted felon.”

“For decades, the Culinary Union has fought for tipped workers’ rights and against unfair taxation,” said the state’s Culinary Workers Union Secretary-Treasurer, Ted Pappageorge, in a statement Sunday.

“Relief is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon,” Pappageorge said.

Trump’s pledge is also a direct challenge to the worker-first political brand of President Joe Biden, who has tried to focus much of his economic platform on cracking down on big corporations and protecting organized labor.

Several recent polls have showed Trump narrowly edging out Biden in key battleground states like Nevada, which will likely determine the outcome of the November election.

The Biden campaign did not immediately return a request for response on Trump’s promise to eliminate taxes on tips.

This tax-free tip promise is the latest prong in Trump’s evolving economic agenda.

Others include extending Trump’s 2017 tax cuts, pressuring the Federal Reserve to lower interest rates and imposing universal tariffs on all imported goods, especially from China. Economists have consistently said this agenda threatens to balloon federal deficits and turbo-charge inflation.

Even so, voters consistently tell pollsters they trust Trump more than Biden to manage the U.S. economy. They also appear to remember the Trump-era economy through rose colored lenses: Trump left office in 2021 with unemployment at 6.3% and an economy that had shed 2.9 million net jobs since he took office, according to the nonpartisan FactCheck.org.

Biden and Trump are scheduled to clash in their first presidential debate on June 27, where the economy will likely be a major focal point.