California's Democratic-controlled Legislature has rejected a Republican proposal to exempt tip income from state income taxes, denying a proposal similar to policy proposals supported by Vice President Kamala Harris and former President Donald Trump.
“It is disappointing that the Legislature decided not to consider providing much-needed relief to California workers,” Republican state Sen. Rosilis Ochoa Bo, who introduced the bill, said in a press release after the bill's defeat.
Ochoa-Bog introduced an amendment in the California Senate on Thursday that would have excluded service industry workers from the state tax exemption on tips, but the proposal was defeated on a near party-line vote without any discussion or debate by the Democratic majority.
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California State Capitol, Sunday, July 17, 2022, in Sacramento, California. (Myung J. Chun/Los Angeles Times via Getty Images)
“California residents live in one of the most expensive states in the nation, and service and hospitality workers are especially burdened by a tax code that makes it difficult for them to make ends meet,” Ochoa-Borg said. “They deserve better, and today's decision is a missed opportunity to help those who need it most.”
The effort to make tips tax-free in the state comes after both Trump and Harris voiced support for a federal tax bill that would make tip income tax-free during their campaigns. Trump first backed the proposal at a rally in Nevada in June, and Harris, who began her political career in California, echoed that sentiment at a rally in Las Vegas in August.
Democratic presidential candidate Vice President Kamala Harris addresses union members surrounded by union leaders during a campaign event at Northwestern High School in Detroit on September 2, 2024. (Scott Olson/Getty Images)
According to a press release from California Senate Republicans, the state's proposal aims to help service workers overcome California's “unsustainable tax burden” by increasing take-home pay for workers who rely heavily on tip income.
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All nine Republican state senators supported the amendment, but nearly all of the state's Democratic senators voted against it, except for Senate President Pro Tempore Mike McGuire and state Sen. Nancy Skinner, who abstained.
Former President Donald Trump spoke at a campaign event in Asheboro, North Carolina on Wednesday. (Kate Medley for The Washington Post via Getty Images)
“It is difficult to overstate the negligence of refusing to even debate such a crucial policy issue,” Republican Senate Minority Leader Brian W. Jones said in a statement. “Democrats knew they were on the wrong side of this important issue, and they chose to sweep the issue under the rug rather than do the right thing for working Californians. The push to repeal the federal tip tax has made it to the campaign trail of both major parties this year, yet California Democrats don't think it's even worth discussing at the state level for their residents here.”
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McGuire's office did not immediately respond to a request from Fox News Digital seeking comment on the Democratic majority's opposition to the amendment.
