US Currency, Cash (File) California Republicans, following former President Donald Trump’s lead, recently proposed an amendment to eliminate taxes
California Republicans, following former President Donald Trump’s lead, recently proposed an amendment to eliminate taxes on tips. This measure even garnered support from Vice President Kamala Harris, who previously represented California in the U.S. Senate.
However, California Democrats in the state Senate rejected the proposal.
Read: Florida Rep. Byron Donalds, Texas Sen. Ted Cruz Lead National Initiative To Nix Taxes On Tips
“Even Trump and Harris both say we should eliminate the ‘tip tax,'” the California Senate Republican Caucus stated, emphasizing the unusual bipartisan agreement on the issue.
Trump first introduced the idea during a speech in Nevada, a state with the highest percentage of tipped workers in the nation.
Shortly thereafter, Harris voiced her support for Trump’s proposal.
“Tipped occupations” are jobs where tips are common in the US, such as waiters & waitresses, bartenders, barbers, and hairdressers. The Budget Lab estimates that there were roughly 4 million workers in tipped occupations in 2023. That’s about 2 ½ percent of all employment.
Read: Texas Senator Ted Cruz Intros ‘Not Tax On Tips’ Act
Many of these workers earn below the minimum wage and rely heavily on tips for their income. The proposal could also benefit higher-paid tipped professions, such as barbers and hair stylists.
In the California Senate, the amendment faced opposition from Democrats, except for Senate President Pro Tempore Mike McGuire (D-Healdsburg) and State Senator Nancy Skinner (D-Berkeley), who abstained from voting. All nine Republicans in the Senate supported the measure.
Given that the California legislature recently addressed a $47 billion budget shortfall through cuts, deferrals, and shifts, it remains unclear what steps the state would need to take to offset potential revenue losses from a state-level exemption on tip taxes.
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