- President Donald Trump stopped in Las Vegas on Saturday.
- He discussed his proposal to exclude workers’ tips from federal taxes.
- Trump said he will work with Congress to push forward legislation.
President Donald Trump stopped in Las Vegas on Saturday to share details about his administration’s plan to exclude workers’ tips from federal taxes.
The president first announced his proposal last June during a campaign rally, also in Nevada, where a significant portion of the workforce is in the hospitality industry and where he scored a major victory in November.
Trump would need approval for the tax change from Congress, where Republicans hold majorities in both chambers.
Former Vice President Kamala Harris, the 2024 Democratic presidential nominee, promoted a similar idea during her campaign.
While in Las Vegas, Trump said he’d work with members of Congress “in the coming weeks” to ensure a bill reaches his desk.
“No tax on tips!” Trump said as a crowd of supporters cheered nearby. During the speech, Trump said his administration would also raise worker wages, but did not share additional details.
During his speech, Trump welcomed American Hotel and Lodging Association CEO and President Rosanna Maietta onstage, where she spoke about the proposal’s potential impact on the service industry.
“I am here to tell you that the American dream is alive and well in the hotel industry today,” she said.
She referenced the tax bill Trump promoted in 2017 during his first administration. “The ‘no tax on tips’ builds on that momentum,” Maietta said. “So, we are so excited to support you in that effort.”
She added that her organization would urge Congress to pass Trump’s proposal.
In June, however, Trump’s remarks drew criticism from the Culinary Workers Union, which includes Culinary Workers Union Local 226 and Bartenders Union Local 165. The union represents 60,000 workers in the Las Vegas and Reno areas.
“For decades, the Culinary Union has fought for tipped workers’ rights and against unfair taxation,” Secretary-Treasurer Ted Pappageorge said in a statement at the time. “Relief is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon.”
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In a statement to Business Insider on Saturday, Pappageorge said, “The Culinary Union welcomes plans to end taxes on tips, but it must not end there.”
“Eliminating taxes on tips and ending the $2.13 sub-minimum wage — that is the reality in too many states across the country — will uplift millions of hospitality workers,” he said. “Taking on both issues is critical to ensuring one job is enough for workers to support their families.”
The statement urged Republicans to reach across the aisle and work with Democrats to find solutions.
“Republicans have made promises to lower the cost of living for Americans. Delivering on those commitments must start with meaningful action, and they must work with Democrats to raise the sub-minimum wage, eliminate taxes on tips, and address corporate greed driving up prices on essential goods like food, gas, and housing,” Pappageorge added. “It’s time for Congress to act now to deliver real solutions for working families.”
Some experts who track the industry earlier told Business Insider that eliminating federal taxes on tips could have unintended negative consequences, like encouraging employers to lower wages to avoid taxes.
Martha Gimbel, the executive director of Yale University’s Budget Lab, told BI that a new system would create “an incentive for employers to try to get more of their workers’ compensation in the form of tips.”
Gimbel said the proposal could let business owners shift the onus for employee salaries onto customers and claim tax breaks through lower payroll and Social Security fees.
Representatives for the White House did not respond to a request for comment from Business Insider.
Trump’s speech in Nevada comes one day after he visited California to address the wildfires that have devastated parts of Los Angeles County and elsewhere.
While at a roundtable with local California officials, the president said he would help fund relief efforts but did not detail how much federal aid California could receive.
Trump also said he would implement an executive order to direct more water from the Sacramento-San Joaquin Delta to Southern California and Central Valley.
On Friday, Trump also visited North Carolina, where some parts of the state are still recovering from the impacts of Hurricane Helene.
Trump on Friday also floated overhauling or eliminating the Federal Emergency Management Agency, calling it a “big disappointment.”
The president said his administration was eyeing mechanisms for potentially empowering governors when it comes to disaster aid.
