NASHVILLE, Tenn. (WTVF) — Thousands of service workers in Nashville — including servers, bartenders, and delivery drivers — are closely watching a rare bipartisan movement that could significantly impact their livelihoods.
Both Democrats and Republicans are rallying behind the idea of eliminating taxes on tips.
Vice President Kamala Harris said she'll fight to end taxes on tips for service and hospitality workers. It's a proposal her opponent former President Donald Trump has touted all summer.
For many service workers, tips are not just a bonus but a crucial part of their income.
Michael Tipton, the assistant general manager at Hal’s Steakhouse in Nashville, understands this reality all too well.
"All of my staff are tipped, and there are days when they're not sure if they can pay their bills to be honest," said Tipton.
His concerns for his employees were part of what motivated him to step into management, seeking the financial stability that comes with a regular paycheck.
"I wanted to know that my paychecks are coming," he said.
Tipton is optimistic about the potential benefits of eliminating taxes on tips, believing it could alleviate some of the financial uncertainty faced by his staff.
"I think it could really help. There's a lot of uncertainty that comes with working a tipped position. I see that every day on the front lines."
The proposal to end taxes on tips has become a talking point in the 2024 presidential race, with both Harris and Trump advocating for the change. This unusual agreement between two political rivals has sparked interest and debate among business owners and workers alike.
Bob Bernstein, the owner of Fido, a popular coffee shop in Hillsboro Village, finds the idea appealing but is cautious about its broader implications.
"You tell me you're going to cut my taxes to zero, I’ll love it, but I'm not sure that's the way the government's going to work," Bernstein said.
He worried that exempting tips from taxes could have unintended consequences, particularly in terms of funding government programs.
The nonpartisan Committee for a Responsible Federal Budget has estimated that exempting tips from income and payroll taxes could reduce federal revenues by $150 billion to $250 billion over the next decade.
Bernstein believed that while the proposal might offer relief to service workers, it could also disrupt the fairness of the tax system.
"It causes so many other issues, not just hospitality issues. I think it was a fair way to tax everybody," he said, urging politicians to focus on taxing the very wealthy more fairly.
The federal minimum wage for tipped employees remains at just $2.13 an hour, making the debate over tip taxation even more significant for those who depend on tips to make ends meet.
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