The frustration of being a service worker in America is a familiar tale. I’ve spent seven years waiting tables, and I can confidently say that few things are more infuriating than dealing with demanding customers, overbearing bosses, and laborious work only to be stiffed by a table that can’t be bothered to leave a decent tip. It’s a problem that affects not just waiters, but anyone who relies on tips for a living.
The Pew Research Center found that most Americans tip 15 percent or less for an average meal, which is hardly enough to justify the long hours and hard work that goes into serving customers. Some restaurants have responded by eliminating tips altogether, replacing them with a base compensation above minimum wage. But this approach has its own set of problems, including the potential for lower earnings and the risk of price increases on the menu.
Former President Donald Trump has proposed a different solution: eliminating taxes on tips for tipped workers. This would not only give workers a much-needed boost in income, but also incentivize them to provide better service. Trump’s proposal has drawn support from top Republicans, including Sen. Ted Cruz, who has introduced legislation to exempt tipped income from federal taxation. Contrast this with Joe Biden who deployed the Internal Revenue Service (IRS) to crack down on waitresses’ unreported tips.
The Committee for a Responsible Federal Budget estimates that Trump’s plan would cost between $150 to $250 billion in revenue. But most of that money would likely recirculate throughout the economy as low-wage workers struggle to make ends meet. Of course, the tax exemption wouldn’t be necessary if more Americans were more generous with their tips. Until then, Trump’s proposal is a welcome solution to a problem that has plagued the service industry for far too long.
