Tuesday, October 1, 2024
Year : 2, Issue: 5
Two decades into her work as a unionized bartender in Reno, Nevada, Kristie Strejc has the comfort of job stability, her pick of the best shifts, and, unlike many in the hospitality industry, enough income that she’d actually benefit from plans floated by both U.S. presidential candidates to exempt tips from federal income tax.
But that isn’t influencing a vote she said is solidly for Vice President Kamala Harris, the Democratic candidate who has the endorsement of Nevada’s powerful Culinary Workers Union Local 226 and in recent polls is leading former President Donald Trump, the Republican challenger, in this battleground state.
Proposals to exempt tipped income from federal taxes have emerged as Harris and Trump use competing economic proposals in areas like tariffs and taxes to vie for the votes of different constituencies, a strategy Trump has since extended to include a tax exemption for overtime pay.
Some of the ideas are expensive. The Committee for a Responsible Federal Budget, a non-partisan public policy organization, recently estimated that eliminating taxes on overtime would cut government revenue by $1.7 trillion from 2026 to 2035.
At least in Nevada, however, where the tip-heavy hospitality industry still comprises more than a fifth of jobs, the proposal to exempt tips from taxes has landed with a bit of a shrug.
David Schmidt, chief economist for the Nevada Department of Employment, Training, and Rehabilitation, said the state had about $95 billion in annual wages reported to a Bureau of Labor Statistics quarterly census of wages in 2023. He estimates no more than about 1.5% was from tips.
Source: Reuters
