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Trump Proposes Changing Tax Code To Exempt Tip Income

'When I get to office, we are going to not charge taxes on tips, on people making tips'

Trump Proposes Changing Tax Code To Exempt Tip Income

Former President Donald Trump proposed amending the tax code to exempt tip income from federal taxes during a weekend campaign stop.

Trump announced his proposal during a Sunday stop in Las Vegas to a resounding applause from the audience.

“So, this is the first time I’ve said this, and for those hotel workers and people that get tips, you’re going to be very happy because when I get to office, we are going to not charge taxes on tips, on people making tips,” Trump said. “We’re not going to do it, and we’re going to do that right away, first thing in office because it’s been a point of contention for years and years and years — and you do a great job of service, you take care of people.”

“And I think it’s going to be something that is deserved — more importantly — popular or unpopular, I do some unpopular things too, if it’s right for the country, I do what’s right,” Trump continued. “But — so those people that have jobs in restaurants or whatever the job may be, a tipping job, we’re not going after it for taxes anymore, that will be ended.”

Trump's proposed amendment to the tax code received significant support from X users.

"According to the BLS, 4.5 million people rely on tips for a significant portion of their income," wrote one user citing metrics from the Bureau of Labor Statistics. "Millions more have side hustles in the growing gig economy. President Trump's plan to exempt tips from federal income taxes would represent a massive stimulus to the economy. MAGA!"

"Tips are a financial thank you to show appreciation for good service and it makes sense they should not be taxed. That folks, is just one way to stimulate the economy & put $ back in the people’s pocket," wrote another user.

Committee to Unleash Prosperity President Phil Kerpen noted Trump's proposal was first suggested by former Texas representative and former Republican presidential candidate Ron Paul.

"His argument is that tips are gifts not wages. Always a crowd pleaser in Nevada," Kerpen wrote.

Paul originally proposed tax cuts to tip income while campaigning for president during a 2012 Las Vegas press conference.

"The truth is the majority of service-industry workers are paid low hourly wages and are expected to earn the rest of their income from tips. ... Not only that, but tips provide a substantial portion of the income of many service-sector employees, many of whom are young people just trying to make a few extra dollars to get through school or single parents often balancing two jobs while trying to make enough to raise a family," Paul said at the time. "That's why it's an outrage that waiters, waitresses and other service-sector employees have to pay taxes on the tips they earn. And to add insult to injury, the IRS makes an estimate of how much service-sector workers will make in tips and taxes them on it even if the taxpayer did not actually earn as much as the IRS estimate!"

"If elected president, I will end this injustice on service-industry workers all across our nation by abolishing all taxes on tips once and for all," he added.

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