Rep. Steven Horsford (D-Nevada) formally introduced a bill on Tuesday that seeks to repeal the federal tax on tips, a proposal supported by both presidential candidates.
The Tip Income Protection and Assistance (TIPS) Act would also eliminate subminimum wages for tipped workers and “prevent employers and high-income earners from exploiting the elimination of the federal tax on tips,” Horsford said.
He announced the bill outside Parliament House as members of the One Free Wage organisation cheered.
“I'm proud to introduce this bill today because six million tipped workers are women and people of color who earn just $2.13 an hour, the poverty wage — disproportionately at a time when families and workers are struggling to make ends meet,” Horsford said at the event.
Horsford's bill would exempt up to $112,500 in tips for service workers nationwide from income tax.
“Latinas and Black women in particular earn less than white men and face a huge wage gap. If we're serious about income equality and closing the gender pay gap, this is a bill that Americans should support,” Horsford said.
“Unfortunately, tips are not a bonus; they are the difference between paying rent or being evicted, between feeding your children or going hungry,” he added. “The TIPS Act would change that.”
The bill was introduced months after President Trump proposed eliminating the tip tax and a month after Vice President Kamala Harris endorsed the idea.
“Hotel workers and people who get tips are going to be very happy because when I'm in office there's going to be no tax on tips,” Trump said. He said at the rally It took place in Las Vegas earlier this summer.
Ms. Harris surprised many Democrats last week when she announced her support for the proposal, which some Democrats and progressive groups say would leave behind low- and middle-income workers who don't work tipped jobs but who need the tax cuts.
The vice president's support for the proposal shows the importance of Nevada in the November election and the influence of the state's service workers unions.
Trump accused Harris of imitating him by supporting an end to the federal tax on tips, and Horsford said in a statement last month that it was Trump who was playing politics.
“Donald Trump has no ideas,” Horsford said at the time, “no policy ideas. He just throws out platitudes without any details.”
