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If you don’t want taxes on tips, you should also welcome a ban on subminimum wages for tipped workers • Nevada Current
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If you don’t want taxes on tips, you should also welcome a ban on subminimum wages for tipped workers • Nevada Current

Members of Culinary Workers Union Local 226 and a Nevada congressman hope to use a popular proposal to eliminate the tip tax to push through a federal ban on allowing employers to pay wages below the minimum wage to workers who receive tips.

Former President Donald Trump, the Republican presidential candidate, proposed eliminating the tax on tips during a rally in Southern Nevada in June.

The Culinary, which traditionally supports Democrats politically, initially dismissed Trump’s proposal as a ploy, but agrees that tips should not be taxed.

In Las Vegas on Saturday, Democratic presidential candidate Kamala Harris said she supports eliminating taxation on tips and raising the minimum wage. The union had already endorsed Harris before her visit.

At an event last week with Nevada State Rep. Steven Horsford, restaurant industry representatives and the congressman said if Trump truly wanted to help tipped workers, he would work to eliminate the federal subminimum wage for tipped workers.

Nevada, Alaska, California, Minnesota, Montana, Oregon and Washington have forbidden Subminimum wage for tipped workers. However, in some states, the legal minimum wage for tipped workers is only $2.13 per hour. The legal minimum wage for all other workers is $7.25.

Horsford said he is working with colleagues in the House of Representatives on a bill to address the subminimum wage problem at the federal level.

“We need to reform it,” he said. “We need to end it … In addition, we need to change the tax policy (on tips) so that it is fair and equitable.”

The Trump team did not respond to a request for comment on Trump’s position on abolishing the federal subminimum wage.

Trump has stated several times during the election campaign that abolishing the tip tax is part of his economic policy.

“This is the first time I’ve said this, and those who work in hotels and get tips will be very happy because when I get into office, we will not tax tips, people who tip,” he said in June.

Kitchen Secretary and Treasurer Ted Pappageorge and union members reiterated their initial skepticism about Trump’s sincerity.

Leain Vashon, a waiter at Paris and vice president of the Culinary Union, sees Trump’s statements as a campaign slogan rather than a political priority.

“It’s not a solution,” he said. “Right now, I just think it’s a slogan that someone can use to get votes in Nevada.”

At the federal level, there are already efforts to exempt tips from federal income tax. To this end, Republican U.S. Senator Ted Cruz has introduced the “No Tax on Tips Act.”

U.S. Senators Catherine Cortez Masto and Jacky Rosen signed the bill in July.

In a statement in July, Rosen said “eliminating the federal income tax on tips would provide immediate financial relief for Nevada’s service and hospitality workers.” In that statement, Rosen also reiterated calls for an increase in the federal minimum wage.

Republican Sam Brown, who is running against Rosen for the U.S. Senate, immediately endorsed the idea of ​​not taxing tips after Trump brought the idea into play.

The Current asked Brown’s campaign team about the candidate’s stance on employers who pay wages below the minimum wage, but the campaign team did not respond.

Former North Las Vegas Mayor John Lee, who is running against Horsford in the 4th Congressional District, did not respond to requests for comment.

Neither the Culinary nor its supporters in Congress can estimate what the actual financial impact would be if tips were not taxed.

An analysis by the left-leaning Center for American Progress assumes that “Exempting tips from income tax does not benefit tipped workers whose income is so low that they are already exempt from income tax.”

The group refers to a Estimate from Yale Budget Lab This means that at least one-third of tipped workers do not earn enough to pay income taxes, and that for middle-wage workers who receive tips and pay income taxes, the tax relief from not taxing the tip portion of their income would be small.

Regardless of the amount, eliminating the tax on tips would ultimately help people make ends meet financially and pay their bills, Pappageorge said.

Although employers in Nevada are not permitted to pay tipped employees less than the minimum wage, Some members of the Culinary group said at last week’s roundtable that they had worked in states with sub-minimum wages and often received paychecks of only a few dollars.

Lori Scavnicky is currently a cocktail waitress at the Luxor. Before moving to Las Vegas a few years ago, she lived in Ohio and struggled through two jobs in restaurants, both of which paid less than minimum wage.

“You never made enough money to cover your expenses, and you could barely live on the tips you got,” she said.

Horsford said there is nothing stopping future state legislatures from rolling back the bans, so Congress must intervene at the federal level.

“Some of these employers are trying to keep their workers on starvation wages,” he said. “We have to break that. We have to break the notion that people can work for less than a fair minimum wage, and to me that’s a living wage.”

Horsford said that both efforts to raise the federal minimum wage and reforming or even banning subminimum wages would be top priorities “when Hakeem Jeffries is Speaker of the House and Democrats are back in power.”

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