Vice President Harris supports eliminating the tax on tips for service and restaurant workers. In her address to supporters in Over the weekend, Democratic presidential candidate and Vice President Kamala Harris pledged in Las Vegas to “raise the minimum wage and eliminate taxes on tips for service and hospitality workers.” Former President and Republican presidential candidate Donald Trump called for the elimination of taxes on tips in June. Republicans in the House and Senate have since introduced bills to make this happen, and Democrats in Nevada’s congressional delegation have also come out in favor of the measure.
Five questions remain unanswered regarding Harris’ tax agenda. Harris told reporters Saturday that she plans to unveil her economic policy platform this week, which her campaign said Friday would be based on President Biden’s budget priorities. TPC’s Nikhita Airi cites five tax policy issues that Harris’ platform could soon address, including potential tax increases, extending the Tax Cuts and Jobs Act of 2017, measures for low-income taxpayers and families, tariffs and the IRS budget.
The tax policy of Minnesota Governor Tim Walz could also influence the debate in the election campaign. TPC’s Richard Auxier examines the record of Harris’ running mate, Democratic Gov. Tim Walz. Five of Walz’s policies in Minnesota could play important roles in the campaign: the expanded child tax credit, exempting Social Security benefits from state income tax for many taxpayers, tax increases on businesses and high-income households, a payroll tax on paid leave, and cannabis taxes.
Speaking of budget and tax policy: Can the state reduce its debt again? Bill Gale and Tayae Rogers of the TPC trace the history of government efforts to reduce debt. “The good news is that the United States has successfully reduced its debt several times in the past,” they write. “The bad news is that past measures were too small to solve the current problem. Solving the debt problem now will require far more comprehensive and sustained policy changes than have ever been attempted before.”
Could a higher tax credit encourage employer-funded child care? TPC’s Renu Zaretsky examines a provision of the Child Care Affordability and Availability Act, introduced last month by Senators Tim Kaine (D-VA) and Katie Britt (R-AL). The provision would expand the Employer-Provided Child Care Credit. The idea seems like a win-win, as it supports increasing child care supply, lowers costs, and allows more parents to stay in the workforce. But increasing child care supply may require solutions beyond tax law.
Connecticut will join the IRS Direct file. Treasury Secretary Janet Yellen and Democratic Gov. Ned Lamont announced Friday that Connecticut will join IRS Direct File for federal tax returns in the 2025 tax season. The IRS has been testing the Direct File program in 12 states during the 2024 tax season. The agency plans to make Direct File available in all 50 states in 2025. Republicans in Congress want to prevent a broader rollout.
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