The debate over whether to eliminate taxes on tips for service and hospitality workers has been heating up, with both Vice President Kamala Harris and former president Donald Trump expressing their support for the idea. However, many economists are warning that this policy may not be as beneficial as it seems.
According to experts, eliminating taxes on tips could potentially end up helping employers more than workers. By allowing employers to keep more of their employees’ tips, this policy may lead to a decrease in wages for workers in service industries. In addition, critics argue that this move could also increase the federal budget deficit, as the government would lose out on tax revenue from tips.
Furthermore, some economists are concerned that eliminating taxes on tips could accelerate tipping culture in the U.S. While tipping is already a common practice in many service industries, experts worry that completely removing taxes on tips may lead to an even greater reliance on tips to supplement workers’ incomes.
In order to better understand how this policy might play out in a Trump or Harris presidency, WSJ breaks down the potential implications of eliminating taxes on tips. Through a series of chapters, the publication examines how the policy would work, what most economists think about it, and how it could be implemented.
Overall, while the idea of eliminating taxes on tips may seem appealing on the surface, many economists are skeptical of its success. As the debate continues to unfold, it will be important for policymakers to carefully consider the potential consequences of this policy before making any decisions.
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Video “Why ‘No Tax on Tips’ Is a Bad Idea, According to Economists | WSJ” was uploaded on 09/03/2024 to Youtube Channel The Wall Street Journal