(NationRise.com) – Former President Donald Trump is proposing a bold tax break for Americans who rely partially or entirely on tips for their income.
Trump, during a campaign stop in Las Vegas on June 9th, unveiled a potentially game-changing proposal. He pledged to fight for tipped income to become exempt from federal income taxes. The crowd’s enthusiastic response was a testament to the potential benefits of this move. It’s important to note that this exemption would only apply to income from tips. Trump also expressed his intent to push for the legislation’s immediate passage if elected for a second term, acknowledging that it has long been a contentious issue.
Trump credited Ron Paul for originally authoring the proposal, which he said could be unpopular among some groups. Paul has argued that tips should be considered gifts, which are not taxable unless a certain threshold is reached. Trump reiterated that his goal is to do what’s right for the United States, even if it’s an unpopular choice. However, the stance is likely to garner support in Las Vegas, where hospitality, food service, and delivery jobs relying on tips are widespread.
While Trump’s proposal may seem promising, it’s not without its challenges. If elected, he would face an uphill battle in Congress to approve such a significant change to the tax code, a change that is currently unprecedented. Even if approved, it could take months for the change to take effect, further adding to the potential hurdles.
Americans are increasingly relying on the gig economy, which is largely based on tips, since the Biden administration’s policies led to historic inflation. However, many of those Americans have also seen their tax bills soar as they unexpectedly fall into higher tax brackets.
Gig economy workers, who often rely heavily or exclusively on tips, face a host of financial challenges. Their income is highly variable, making budgeting a constant struggle. Additionally, they typically work as contractors, which means they don’t receive benefits from their work. This lack of benefits translates to less retirement funds and more out-of-pocket medical expenses, further exacerbating their financial woes.
It may also come as good news to a growing number of Americans who are concerned that the US is heading into a recession soon (or is already in one).
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