Bipartisan bill to created tax deduction of up to $25,000 now goes to House but experts have criticized measure

The US Senate passed the No Tax on Tips Act on Tuesday after the Nevada senator Jacky Rosen brought the bill up for a unanimous consent request.

The bipartisan bill will create a tax deduction of up to $25,000 for cash tips reported to employers by workers for withholding purposes on payroll taxes, with a cap on the salary for eligible workers at $160,000 annually.

Economists and labor advocates have criticized the legislation, with concerns it will incentivize the expansion of tipped work, undermine pay increases and would affect only a small segment of about 5% of low-paid workers who receive tips.

  • BrianTheeBiscuiteer@lemmy.world
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    1 day ago

    Just some napkin math, if you make $50k a year and reached the $25k threshold you’d get back about $5k in taxes. Not nothing, but they’re also gonna make it harder to get SNAP and Medicaid benefits. If you don’t qualify (i.e. jump through every hoop) for the latter that $5k is gone and then some. People are about to get more stingey with tipping too I imagine.

    • snooggums@lemmy.world
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      1 day ago

      People are about to get more stingey with tipping too I imagine.

      I’m going to be avoiding places that tips expanded into to subsidize wages entirely. Sit down restaurants will still get tips until we can get rid of them entirely, but that’s it.

        • snooggums@lemmy.world
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          1 day ago

          I’ve always done 20% because it is easier back when 15% was the norm and in the vast majority of cases it was less than $1 difference. You are right that there is no reason to increase the percentage when the prices are rising anyway.

          Also, basing the tip on the food cost is a stupid system in the first place. The waitress at the diner where a meal costs $10 is doing just as much work as the one at the high end restaurant that charges $50.