Constitutionally, Trump Can’t Save Tips From Taxes — Despite What He Says

Restaurant checks have long been a way to transfer information to front-of-house workers — generous gratuities on the tip line, a number for a cute server, doodles because you just had a great meal and were given a blank canvas and a pen. But a new trend of leaving messages on checks has restaurant staff and Internet users baffled.

Some diners are sharing their input on the upcoming election on their credit card receipts, adding the message “Vote for Trump and tips won’t be taxed” in the space for the signature. The idea for the guerilla-style messaging comes from the former president and current candidate himself, who encouraged supporters to write “no tax on tips” on their restaurant receipts this summer.

During an event on Friday, June 14 at Club 47 in West Palm Beach, Trump’s remarks on the celebration of his 78th Birthday included boasting about a new tax plan — part of his 2024 campaign for re-election. Initially introduced at a rally in Las Vegas on June 9, the plan suggests not taxing tips for “restaurant workers, hospitality workers, and anyone else that gets tips.”

And Republican Senators just passed the No Tax on Tips Act — a bill that excludes tips from income tax. However, not taxing tips could lead to a federal revenue deficit of up to $250 billion, according to the Committee for a Responsible Federal Budget (CRFB).

But is this a strategy straight out of the billionaire playbook for tax evasion or a real suggestion to try and help hard-working people in the increasingly tough service industry? 

To start, the President of the United States is not in charge of the tax code. Congress works on taxation policy, but Trump’s allies could potentially help create legislation to further his idea. Various Republican representatives have shared support of the idea this week, while others have voiced concerns about the practicality of the decision and its impact on the federal deficit. 

Congress would also have to fight to change the federal tax code to exclude tips from income, particularly since tips are a significant part of income for restaurant workers who make less than minimum wage. 

The restaurant industry is also not convinced that this plan, if it even became tax law, is good for workers. “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,” said culinary union secretary-treasurer Ted Pappageorge said in a statement following the Vegas Trump Rally.

Further, the plan is not equitable for workers earning minimum wage who aren’t in tipped jobs, say, working the deep fryer at McDonald’s or preparing frozen burger patties in a warehouse. The Federal Minimum Wage hasn’t increased since President Obama was in office, growing from $6.55 per hour in 2008 to $7.25 per hour in July 2009, 14 years ago. $7.25 per hour equates to a salary of $15,080, which puts individuals earning minimum wage at the poverty line. 

“It’s pandering to workers,” Saru Jayaraman, president of One Fair Wage, told the Wall Street Journal about Trump’s proposal. “It doesn’t actually solve the problem of economic instability and poverty and struggles that most of these workers are facing right now.”