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PBS News Hour - Segments

Economists explain hidden downfalls of ending taxes on tips

PBS News Hour - Segments

PBS NewsHour

News, Daily News

4.11K Ratings

🗓️ 19 September 2024

⏱️ 8 minutes

🧾️ Download transcript

Summary

Tax cuts and credits have been a popular theme during this campaign. Both candidates have also proposed several tax breaks and have not always explained how to pay for them. That's true of one idea former President Trump and Vice President Harris support: no taxes on tips. Economics correspondent Paul Solman looks at what's behind the proposal and some concerns around it. PBS News is supported by - https://www.pbs.org/newshour/about/funders

Transcript

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0:00.0

Tax cuts and credits have been a popular theme during this campaign.

0:05.0

Former President Trump's latest proposal is ending a cap on the federal deductions taxpayers get for paying state and local taxes.

0:13.0

A cap he implemented as president

0:16.0

and a change that could cost more than a trillion dollars over a decade.

0:20.0

Both candidates have also proposed several tax breaks and have

0:24.2

have not always explained how to pay for them.

0:26.8

That's true of one idea, Trump and Vice President Harris

0:30.2

support.

0:30.9

No taxes on tips. Economics correspondent Paul Solomon looked at what's behind

0:35.9

that proposal and some concerns around it.

0:38.6

Prince Chickata, bartender at Bus Boys and Poets in Washington, D.C. 80 to 90 percent of his income

0:49.0

from tips. Suppose they were no longer taxed.

0:52.3

That would be great.

0:54.0

No taxes on tips.

0:56.0

It was a proposal first floated by former President Trump in June.

1:01.0

When I get to office, we are going to not charge taxes on tips.

1:07.0

Vice President Harris adopted the idea in August.

1:10.0

When I am President, we will continue our fight for working families of America, including

1:17.3

to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.

1:25.0

On Capitol Hill, don't tax tips bills were introduced this summer with bipartisan support.

1:32.9

What's the average tip you get?

1:34.4

Anywhere between 15 and 20.

...

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