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Should tips be taxed? People have their say on the proposal
Idaho

Should tips be taxed? People have their say on the proposal

(WXYZ) — Both former President Donald Trump and Vice President Kamala Harris agree that tips should not be taxed, but others say we should reconsider the measure.

It’s been 10 years since Vanessa Johnson started working as a waitress.

“I’ve been working as a servant since I graduated from high school. I just like being able to provide good service.” said Johnson.

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Although she loves her job, Johnson could do without having money deducted from her main source of income – tips.

“That would be a lot better for us. It would help us not have to keep up with everything year-round, and it would just help us make more money because we don’t really see that on an hourly basis.” said Johnson.

Both presidential candidates promise to eliminate the federal tax on tips if elected. This is great news for Johnson and also for Nasser Baydoun, the owner of District 12 Restaurant.

“I think tax-free tips are a great idea,” Said Beydoun. “The additional effort of filing tax returns and withholding taxes is a burden for both the employee and the owner.”

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Tony, co-owner of Whisper Restaurant, which will open in Dearborn later this year, feels similarly.

“It would definitely help a lot of people. Especially people who work in this business.” Said Tony.

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“Their tips are what they work for, so no, I don’t think they should pay taxes for your waiters for any kind of massage therapy or nail care,” added Carol Shaul.

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According to a Yale University study, only about 2.5% of all workers receive tips, and a small percentage of those actually pay taxes, causing some economists to worry about the real impact.

“Whether or not we tax their tips will not affect their bottom line, and it will not affect taxpayers’ bottom lines. What it could affect, however, is the way employers treat those employees.” Said Shooshan Danagoulian, associate professor of economics at Wayne State University.

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Danagoulian fears that this measure could affect wage growth for tipped workers.

“The picture has not changed much, and yet because of this tax change there is a possibility that employers will not give their employees pay rises because they can argue that the tax relief is a pay rise,” said Danagoulian.

Because this resolution must be approved by Congress, it may not be implemented no matter who is elected.

“We’ll see. We’ll see how it goes and whether they keep their part of the bargain.” Said Tony.

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