President Joe Biden supports the idea of abolishing tip taxes for service workers, the White House said Monday, two days after Kamala Harris was accused of stealing Donald Trump’s campaign promise and months after his own administration came under fire for cracking down on service workers and others who failed to report tips.
The policy is popular with voters and could help decide the outcome of elections in key battlegrounds like Nevada.
“Absolutely,” White House press secretary Karine Jean-Pierre said when asked if Biden would sign legislation ending the tip tax.
“This is something the president supports. He supports eliminating tip taxes on service and hospitality workers, while raising the minimum wage and preventing the wealthy from taking advantage of the system.”
The issue is now the subject of a tug-of-war between electoral candidates.
White House Press Secretary Karine Jean-Pierre said President Joe Biden backed Kamala Harris’ proposal to abolish the tip tax (months after Donald Trump proposed the policy)
Trump has campaigned on that promise since June, when he said a waitress in Nevada told him how the government was taking too big a cut of her tips.
Then on Saturday, a day after the Culinary Workers Union endorsed her, Harris vowed to do the same if elected.
“My promise to everyone here is that when I’m president, we will continue to fight for working families, including by raising the minimum wage and eliminating tip taxes for service and hospitality workers,” she said.
Trump immediately accused her of stealing the policy.
“The difference is that she won’t do it, she just wants it for political reasons!” he posted on his website Truth Social, using his idiosyncratic style of capitalization.
“This was TRUMP’s idea. She has no ideas, she can only steal from me.”
The proposal has proven popular with voters and is now one of the few issues on which both candidates agree.
Harris’ proposal could lead to a federal funding black hole of up to $200 billion over 10 years, according to the nonpartisan Committee for a Responsible Federal Budget.
But Jean-Pierre struggled to explain why it was only now, three and a half years later, that the administration was considering the issue.
MAGA Inc., a pro-Trump Super PAC, is offering stickers to promote Donald Trump’s new promise to eliminate tip taxes. This comes after diners shared receipts on which they had written in support of the policy to help workers who rely on tips.
Vice President Kamala Harris at the University of Nevada on Saturday as she unveiled her policy proposal, drawing the ire of Trump.
He said he did not have a timeline to offer on the reasoning behind the announcement.
“There are things that the president and this vice president have done over three and a half years that have helped working people that Republicans in Congress have opposed,” he said.
Tips are classified as taxable income, and Form W-2 includes a box for “wages, tips and other compensation.” However, the IRS has long said it has been difficult to get workers and employers to submit accurate data.
Last year, it proposed a new mechanism to improve compliance.
It would allow employers to sign up to a voluntary system that uses their “point-of-sale” computer systems to collect data on tips. Employers would then submit an annual report, reducing the chances of staff or businesses facing a dreaded audit.
In some quarters, the proposals were seen as a repressive measure.
“The proposed SITCA program is designed to take advantage of advances in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance,” the IRS said when it announced the proposal.
‘The proposed program would also reduce administrative burdens for taxpayers and the IRS and provide greater transparency and certainty for taxpayers.’