Proposals to eliminate federal income tax on tips

While cutting the tip tax may sound like a good idea, many economists are not enthusiastic about it.

Earlier this summer, former President Trump proposed eliminating the federal tax on tips. A few weeks ago, Vice President Harris said that if elected, she would also support eliminating the tax on tips for service and hospitality workers such as waiters, bartenders and hairdressers.

While tips are considered taxable income, cash tips from restaurant workers and others are rarely reported. However, with the increasing popularity of credit cards and mobile payment options, that has changed.

On Tuesday at 9 a.m., MPR News anchor Angela Davis and her guests will discuss why the idea may not help and could actually hurt most tipped workers.

And we want to hear from you too.

Do you rely on tips? Are you a business owner whose employees rely on tips? What do you think about the proposal to reduce federal income tax on tips?

Call us at 651-227-6000 or 800-242-2828.

Guests:

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