So, how's this No Tax On Tips thing gonna go?
The Indicator from Planet Money
NPR
4.7 • 9.5K Ratings
🗓️ 20 August 2024
⏱️ 11 minutes
🧾️ Download transcript
Summary
The idea may sound good on first go, but it has its detractors, namely economists and tax experts. Their fears include unfairness and people gaming the system.
On today's episode, how to put in place guardrails for a policy that many economists believe is likely to go off the rails.
Related episode:
Why Americans Can't Quit Tipping
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Transcript
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| 0:00.0 | NPR. We've heard a lot over the last several weeks about getting rid of taxes on tips, notably |
| 0:17.2 | from Donald Trump. |
| 0:18.9 | It's called no tax on tips. |
| 0:21.2 | No tax on tips. No tax on tips. |
| 0:24.2 | And then Kamala Harris in her Nevada speech about a week and a half ago. |
| 0:28.0 | And eliminate taxes on tips for service and hospitality workers. |
| 0:33.0 | But you know who doesn't agree with this policy? |
| 0:35.0 | Economists. |
| 0:36.0 | Yes, economists and tax experts like Howard Glegman. |
| 0:41.0 | It's a terrible idea. |
| 0:42.0 | Howard is a senior fellow at the Urban Brookings Tax Policy Center. |
| 0:46.6 | And well then, should we just go through some of the reasons why most economists hate this idea? |
| 0:50.9 | Yes, let us count the ways. All right. Unfairness for one thing like why |
| 0:55.4 | should a waiter get part of their income tax free but the dishwasher in the back |
| 0:59.7 | doesn't nor does say a cashier at target. |
| 1:02.6 | Also more than one in three tipped workers already don't pay federal income taxes. |
| 1:07.0 | They don't earn enough. |
| 1:08.3 | People could also game the system. |
| 1:10.3 | What's stopping a corporate lawyer from taking their fees as a gratuity? |
| 1:14.6 | Yeah, maybe a tip job when you go in for your merger or acquisition. |
| 1:17.6 | It might be a pretty big job. |
| 1:20.6 | It's not like a take a penny leave a penny situation. |
... |
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