Rep. Steven Horsford (D-Nev.) officially introduced legislation on Tuesday seeking to eliminate federal taxes on tips, a proposal that both major presidential candidates have backed.
The Tipped Income Protection and Support (TIPS) Act would also eliminate subminimum wages for tipped workers, to “prevent employers or high-end earners from exploiting the elimination of federal taxation of tip,” Horsford said.
He announced the bill outside of the Capitol while members of the One Free Wage organization cheered him on.
“Today, I am proud to be introducing a bill because a disproportionate number of the 6 million tipped workers who are women and people of color make as little as $2.13 cents an hour, which really is poverty wages, at a time when families and workers are trying to afford the cost of living,” Horsford said at the event.
Horsford’s bill would exempt up to $112,500 of tips from income taxes for service workers across the country.
“Latinas and Black women in particular face significant pay disparities earning less than their white male counterparts. If we’re serious about income equality and closing the gender pay gap, then this is the bill that people need to get behind,” Horsford said.
“Sadly, for too many tips are not a bonus; they are the difference between making rent or facing eviction, between feeding their children and or going hungry themselves,” he added. “The TIPS act will change this.”
The bill comes several months after Trump proposed ending taxes on tips and a month after Vice President Kamala Harris endorsed the idea.
“For those hotel workers and people that get tips, you’re going to be very happy. Because when I get to office, we are going to not charge taxes on tips,” Trump said at a rally in Las Vegas earlier this summer.
Harris surprised many Democrats when she came out in support of the proposal last week. Some Democratic lawmakers and progressive groups say the move would leave out lower- and middle-income workers who don’t have tipped jobs, but also need tax relief.
The vice president’s embrace of the proposal points to the importance of Nevada to November’s election, and the clout of the service workers unions in the state.
Trump has accused Harris of copying him with her support for eliminating federal tax on tips. Horsford in a statement last month said it was Trump who was playing politics.
“Donald Trump has no ideas,” Horsford said at the time. “He has no policy ideas. He threw out a few words as red meat without details.”
