When Donald Trump appeared at a Las Vegas rally in mid-June, he broke from his usual rally ramble to extend a promise to low-wage workers.
“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,” Trump said. “We’re going to do that right away, first thing in office.”
It’s not clear if Trump’s promise was the result of some deep dark GOP think tank, or whether it sprang randomly from the same mind that conceived the war between sharks and wet batteries, but if Trump returns to office, he’s not going to repeal taxes on tips first thing. First, because changing taxes requires legislation. Second, because Trump has promised to do a metric shit ton of other things as soon as he regains custody of the Resolute Desk.
That promise may sound tantalizing, especially to service workers forced to get by on tips while collecting the absolutely insane federal tipped minimum wage of $2.13 per hour. But what looks like a sweet deal for some workers is a very, very sour pill for most—and a trap designed to give the ownership class even more control over what people are paid.
Wherever the idea originated, the “no taxes on tips” idea has become a standard part of Trump’s recent appearances. It may seem like a rare example of Trump deigning to look past the millionaires buying memberships at his golf clubs, to pander to the people waiting tables.
It’s not.
First, removing taxes on tips could cost governments an estimated $250 billion over 10 years. That’s not the kind of thing that’s about to bother a Republican Party set on burning through another $4.6 trillion to extend their tax breaks for corporations and billionaires. At first glance, it also might not seem like the kind of thing that should bother a $2.13-per-hour worker, but it should. If the taxes are removed from the payroll tax, it could endanger both Medicare and Social Security, which are funded by payroll taxes.
That might not be a concern for a party set on gutting social services. But it should be a concern for everyone else.
There’s another issue with lifting these taxes. Does that mean tips aren’t part of official wages, and how does that affect a worker’s salary when applying for an apartment or loan? Would Trump’s new law simply allow employers to steal worker’s tips as Trump proposed in 2017?
But that almost doesn’t matter. The proposal itself is a kind of theft.
It’s a response to Democratic calls for living wages and a pushback against an end to the tipped minimum wage that is on the verge of spreading across the country. When voters go to the polls in Arizona, Massachusetts, Michigan, and Ohio this year, they’ll get a chance to end the two-tiered system that leaves service workers earning a “subminimum” wage. (Lawmakers in Connecticut have also reintroduced a bill to do the same thing.) Getting rid of that two-tiered system would help stop Republicans from accomplishing something else that this proposal would bring: a schism between low-wage workers.
Under Trump’s proposal, a warehouse worker earning $15 per hour would be subject to taxes on all those wages, but a service worker would see taxes on only pay, not tips. That’s a system designed to generate instant enmity—especially if non-tipped workers end up shouldering the extra burden of Social Security and Medicare.
Where Democrats are offering a plan that lifts the wages of all workers, Trump is dangling an offer that splits off a fragment of workers, giving them an incentive for putting him in power, even if that means everyone suffers.
That’s not the end of it.
Hotel and restaurant workers may think Trump’s offer sounds good to them, but it sounds much better to hotel and restaurant owners. They wouldn’t be worried about paying their workers a living wage. Instead, they could keep doing what they do now—shift the cost of paying those workers to consumers while keeping their costs at rock bottom.
It’s a ploy to grab one fragment of working-class Americans, lock them in as Republican voters, and give them an incentive to support a system that keeps them trapped. And it rewards Trump’s wealthy supporters far more than workers.
And finally, it also leaves those workers completely dependent on a tipping culture that, to put it mildly, pisses off a lot of Americans. Americans, as a rule, are generous tippers when compared with most of the world, but that’s largely a function of a system that dumps the responsibility for worker wages onto consumers. Increasingly, Americans are tired of this system. A system that leaves workers dependent on voluntary payments is one that leaves them at the mercy of assholes and subject to pushback when the public mood turns.
For workers interested in pocketing more money and protecting their futures, here’s a really big tip: Don’t vote for Trump.
