It’s a brand new administration, and the new prez is determined to fight for the underdog—if his past pronouncements can be taken seriously. Case in point? Trump’s campaign declared last June, “When I am president, we will continue our fight for working families of America, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.”
If the new Congress passes the bill, it should be a real boost for low wage workers who depend on tips to make ends meet—right? Well, not exactly. Cutting taxes on tipped wages sounds great, until you get under the hood and learn that most tipped workers don’t earn enough to pay taxes in the first place. It’s what you might call a phantom benefit, but it sounds good when politicians propose getting rid taxes on tips.