Why it matters: Typically, ideas like these are tough to turn into reality, but next year when the Trump tax cuts expire, Congress will likely pass some kind of new tax bill.
- That creates an opportunity to put new policies in place, says Brendan Duke of the Center for American Progress Action Fund.
The intrigue: Where things start to get wild is outside the restaurant industry, as Americans try to figure out ways to classify more of their income as tips. Think bankers’ bonuses or sales commissions — or even pay for a Substack writer or freelance podcaster.
- The U.S. tax code already has different rules for different kinds of income — capital gains, for example, are taxed at a lower rate than payroll income.
- When those kinds of divides happen, you create enormous incentives for people to game the system, says Howard Gleckman, a senior fellow at the Tax Policy Center.
- Those kinds of shenanigans typically happen with higher earners — think of the carried interest tax loophole, for example.
For the record: An official from the Harris campaign said the policy would include “strict requirements to prevent hedge fund managers and lawyers from structuring their compensation in ways to try to take advantage of the policy.”
- Trump’s campaign hasn’t offered much in the way of detail.
Servers work their backsides off. Firstly, those trays are backbreaking, then they fill condiments, wrap silver, if they’re not finished with that by the time customers leave their tables, and they can’t fill condiments while customers are at the table. Sweetener packets must all be turned the same way. Tables must be sanitized, windows cleaned, the floors swept or vacuumed or mopped, often sanitized. Who do you think cleans and sanitizes the bathrooms? Helps get the kitchen staff caught up?
They do, but the fact remains that you can’t effectively incentivize people to work more for you personally when they’re already soul-crushingly overworked doing things for everyone else in their rotation. Trying to get more out of nurses who are in the industry already would be trying to squeeze blood from a stone. Also, you don’t go to college for several years to be a server. If people realize they’re going to have to beg for tips from their patients, then that won’t bode well for the profession.