No tax on tips was part of the Republican platform last year in the presidential election. Now, it’s becoming a topic of conversation on the campaign trail for governor this year.
Republicans are hoping that voters will respond to a campaign promise to get rid of taxes on some income for service workers in the tourism, restaurant or entertainment industries. This is how Republican candidate for governor Winsome Earle-Sears concluded a recent stump speech in Northern Virginia.
“No tax on tips. We’re going to try to get rid of that too.””
Megan Davis at the Commonwealth Institute says it’s a bad idea to give restaurant servers a break when you’re not giving a break to the dishwashers too.
“Some low-income workers wouldn’t see any benefit. You can think of a restaurant server making the average wage in Virginia, which is actually higher than a home health care worker or a child care worker makes on average in Virginia," Davis explains. "And they wouldn’t see a benefit from that proposal.”
Also, she says, it’s an invitation for shenanigans in other industries. Lawyers, for example, could arrange for their payments to be in the form of a tip to avoid paying taxes on their income.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
