As the 2024 election approaches, both Vice President Kamala Harris and former President Donald Trump have proposed eliminating federal taxes on tipped income, a move that could significantly impact millions of minimum-wage workers across the United States. This proposal is particularly relevant in Nevada, a key swing state with a high population of tipped workers [7b39adfd].
Currently, there are approximately 4 million tipped workers in the U.S., representing only 2.5% of the total workforce. In 2022, about 37% of these workers faced no federal income tax, highlighting the existing disparities in taxation for low-wage earners [7b39adfd]. Trump's proposal, made during a campaign event in Las Vegas on August 23, 2024, was followed by Harris's similar commitment two months later, reflecting a growing political consensus around this issue [7b39adfd].
Critics of the no-tax proposal argue that it primarily benefits a small fraction of low-wage workers, potentially leaving many others without similar tax relief. The fiscal impact of these tax cuts is estimated to range from $107 billion to $250 billion over the next decade, raising concerns about their long-term sustainability [7b39adfd].
In addition to the no-tax proposals, both candidates are addressing broader economic issues, including the federal minimum wage, which is expected to be a significant topic of debate in 2025. Harris's plan has garnered support from unions, while skepticism remains regarding the GOP's proposals [7b39adfd].
The implications of these tax reforms are profound, as they could reshape the financial landscape for tipped workers and influence the overall economy. As Election Day on November 5, 2024, approaches, voters are tasked with considering how these tax policies will affect their livelihoods and the economic environment at large [7b39adfd].