Trump’s “No Tax On Tips” Is A Complete Scam

Donald Trump campaigned on “no tax on tips,” which would do exactly what the name says. In theory, that sounds great for people who work tip-based jobs. However, this isn’t the boon that it seems, and it will end up screwing over workers and consumers while handing a huge windfall to corporations. Ring of Fire’s Farron Cousins explains how this idea is nothing but a scam to benefit the wealthy.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

On Monday while Donald Trump was at Camp David, uh, he did a press conference. And during that press conference, for some unknown reason, the CEO of Uber was there at Camp David visiting Donald Trump. And so the CEO of Uber sitting next to Donald Trump starts talking about how amazing Donald Trump's budget bill is because he's gonna get a big tax break. And because it includes Donald Trump's infamous no tax on tips and oh my God, that is gonna be the best thing for my Uber drivers, is no tax on their tips. Now, as everybody knows, Donald Trump did campaign on no Tax on Tips. He insisted Republicans put that in this legislation. But here's the dirty little secret that I have not seen a single person talk about with regards to no tax on tips. Because not taxing the tips of tipped workers is not going to be a windfall for those employees.

It will in fact be a windfall for the corporate owners. Let me explain to you how this will work. Not taxing people's tips, meaning whatever you get tipped, you keep that the government doesn't get their hands on it, that is your money. What does that do for the people running these businesses large and small, by the way, it incentivizes them to depress wages, right? Because they'll go to their employees and say, listen, you don't want us paying you more, because if we do, you're taxed on all that. You know, so, so technically it's better for you to make a lower wage and rely more on the tips, right? That's how they will sell it to their employees. And unfortunately, most employees will be like, well, yeah, I don't wanna lose my money to taxes, so keep paying me minimum wage, which for a server is $2 and 13 cents in most parts of the country. And I'll just rely on the tips, right?

That is a windfall for the corporations, whether it's a chain restaurant, you know, or whatever. They get to save money by paying their employees less, convincing them that No, no, no, you want the non-taxed money, which by the way comes from you. So you going out there to a restaurant or you know, whatever it is, you are now on the hook consumer to basically pay these people salaries 'cause they work for a greedy corporation that refuses to do it. You will now feel more compelled to leave a bigger tip because you know they're getting screwed by their employer and they don't have to pay taxes on it. This is money coming out of your pockets to fund a tax break for the same corporations that are now saving even more money by depressing the wages of their tipped workers. And let me tell you something else.

As somebody who spent years of their life as a tipped worker in a restaurant, let me tell you the reality of it. Unless you are a server at, you know, a high scale swanky restaurant in a big city where you could make a thousand, maybe 2000 in tips a night. 'cause you got people whose bills are one to $2,000 per bill. Unless you're one of those people, you're typically not paying any tax on your tips already, as it is, folks, here's why, as I said, as a server, 'cause the wage is the same today as it was 20 years ago when I was waiting tables. You get paid $2 and 13 cents per hour and your tips get reported separately. So when you get your paycheck, it is typically a dollar or two. Even if you worked 40 hours at two 13 an hour, your paycheck is usually like a dollar or less because that's all your taxes coming out of it. And then, do you know what happens to the vast majority of tipped workers across the country when they file their taxes, which they didn't actually have to pay? It didn't technically come outta their tips, they get refunds.