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Like many in the service industry, Kramer is in favor ofPresident-elect Donald Trump’s campaign promise to eliminate tax on tips, one that Vice President Kamala Harris also endorsed with certain guardrails and whichhas already seen movement in Congress.
“Of course, it will make me less stressed (to have) a couple hundreds in my pocket,” Kramer said. She added she isn’t sure if she currently makes enough from bartending to pay federal income tax.
But whether Kramer could actually see those savings is uncertain. With Trump slated to take office in January, only a small sliver of employees – which include restaurant servers, hospitality workers, waiters, bartenders and hairdressers – would see the tax benefit. That’s because a large share don’t earn enough to pay federal income tax.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Expert predictions with real-time global stock and futures data to help you easily capture market movements. Trump had previously suggested he would eliminate federal income and payroll taxes on tips. But questions remain on how that would work and whether it would be possible to eliminate both those taxes. Trump has not provided many details about the specifics of his plan.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Free global stock market data to help you plan the best investment strategies and seize market opportunities. Tax cut promises were among the biggest economic reasons why some communities voted for Trump. With many Americans worn down by inflation,a flurry of pledgesincluding on overtime pay and Social Security benefits also struck a chord.
But it was the no tax on tips promise that had the most sticking power, said Heidi Shierholz, president of the Economic Policy Institute. Economic experts told 【 - Free Stock Index Interpretation 】 Trump could put his promise into action, especially because versions of the pledge have received bipartisan support. Bideneven indicatedhe supports it, along with raising the minimum wage.
But critics say there are thorny issues involved and that such a change wouldn’t help that many low-income employees. Kramer herself isn’t sure if she qualifies for the threshold to benefit.
Despite their small numbers, tipped workers are highly visible in American life. About 4 million people worked in tipped occupations in 2023, or about 2.5% of all employment, according to the Budget Lab at Yale University, a policy research center.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Expert predictions with real-time stock, futures, and metals, energy data to help you quickly recover and grow. Tipped workers skew younger (teenagers make up 3% of overall employment, but 13% of tipped occupations) and are paid less.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Real-time India stock and global stock indices, futures prices, and data to help you make efficient investment decisions. That means many earn too little to owe federal income taxes – 37% of tipped workers fell into this category in 2022, the Budget Lab found.
John Seymour, the owner of sit-down restaurant chain Sweet Chicks in New York City, said that full-time employees at his restaurant would likely make enough to meet the threshold to owe income taxes. But in a city like New York, many front-of-house staff are only working part-time.
“The only effect that it (cutting taxes on tips) has is a positive effect. Them (the staff) earning more of an income is always a benefit to us,” Seymour said. Minimum wage isn’t enough to pay the bills, he added.
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How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Free expert stock trend predictions to help you identify high-potential stocks and maximize returns. With real-time global market indices, futures, metals, energy, and agricultural product data, our platform enables you to make informed investment decisions. The proposal could also be relatively inexpensive compared to Trump’s broader tax plans. While extending the 2017 tax cuts would be about $4 trillion, in comparison, the Budget Lab at Yale University estimates no tax on tips could cost anywhere from $60 billion to $200 billion over 10 years.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Real-time stock market predictions and analysis, offering precise advice on top-performing stocks to help you seize the best opportunities for growth. Gain access to expert insights and global market data to make timely investment decisions. While not every tipped worker meets the threshold for owing income taxes, every worker in America pays payroll tax on their first dollar of income. Trump has briefly mentioned eliminating payroll taxes on tips; while that would ensure that every tipped worker gets some benefit, it also raises the cost and brings up more complicated issues.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Get accurate stock forecasts and market predictions from top financial advisors. With real-time updates on stock indices, exchange rates, and futures data, you'll be equipped to make profitable decisions and grow your capital steadily. Republican Sen. Ted Cruz of Texas introduced a bill in July titled “No Tax on Tips Act,” which would allow workers to deduct tips paid by cash, check, credit card and debit card on their federal income taxes. However, it would not eliminate federal payroll taxes, which fund Social Security and Medicare and total 15.3%, half of which is paid by employers.
Cutting payroll taxes could impact the lifespan of Social Security and Medicare. Social Security is alreadypredicted to be insolventby 2034, according to the Social Security trustees.
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Businesses and workers could also find ways to take advantage of the law, such as reclassifying commissions and bonuses as tax-free tips if there aren’t sufficient legal safeguards.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Expert predictions with real-time stock trends, futures prices, and exchange rate fluctuations to help you select the right stocks and achieve your financial goals. Stay ahead of the curve with accurate, real-time investment insights. Many economic experts who spoke to 【 - Free Stock Index Interpretation 】 advocated for raising the federal minimum wage for tipped workers. The tipped minimum wage hasn’t been adjusted since the 1990s, Tedeschi said.
How is the market cap and valuation of Bodhi Tree Multimedia Limited (543767) ✌️【Online Trading】✌️ Free access to real-time stock market data analysis, global market trends, and expert predictions. Capture emerging opportunities and grow your portfolio steadily, with insights into metals, energy, and agricultural products. The federal minimum wage for tipped workers is $2.13 an hour, but they must make at least the federal hourly minimum wage of $7.25 or their employers have to cover the difference. Many states and municipalities have higher minimum wages and minimum tipped wages, while some states have eliminated lower minimum wages for tipped workers.
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“If tip workers were all getting $17 an hour as a base wage that would matter so much more than not having to pay income taxes on their tips,” Shierholz said.
“If you want to help working people, then you should have policies that are about the level of your income, not the type of income that you earn,” Shierholz said.
Comparing a waiter at Waffle House and a cashier at McDonald’s, “they’re both low-income workers, both essentially in fast food service, but because culturally we tip one, there’s one that might get a benefit from this proposal,” Tedeschi said.
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