CINCINNATI — It’s the policy discussion that’s got the service industry talking: the potential elimination of taxes on tips for service workers.
Vice President Kamala Harris and former President Donald Trump have both made the promise on the campaign trail — Trump in June, Harris earlier in August.
Both campaigns made their announcement in the swing state of Nevada, where the hospitality industry is a large employer.
At home in Ohio, state Rep. Jay Edwards has introduced Ohio House Bill 643, which reads in its entirety: “The General Assembly declares its intent to exempt tips and gratuities from income tax.”
In a statement, John Barker, President & CEO of the Ohio Restaurant & Hospitality Alliance, said that they are “aware” of the campaign promises.
“We are always open to ideas that support Ohio’s restaurant and hospitality community and look forward to our continued work with the National Restaurant Association regarding the No Tax on Tips Act that’s been introduced in both houses of Congress,” he said.
Barker said they plan to work with Edwards throughout the legislative process.
“Tax policy plays a major role in the vitality of the restaurant and hospitality industry in Ohio and across the country,” Barker said.
At Christine’s Casual Dining in Western Hills, bartender Lorraine Feltman said it’s been “weird” to see restaurant servers at the center of American political discussion, “but I’m happy to see that they’re recognizing the servers.”
Tips are what servers mainly survive on, she said, noting that minimum wage is lower for tipped workers.
The saved income from no income taxes would mean extra money for groceries and taking out her kids and grandkids, she said.
For the nation’s tipped workers, tips are considered taxable income. Restaurant workers told us, historically, cash tips had gone largely unreported. That has largely gone away with the proliferation of credit cards.
At Court Street Kitchen in downtown Cincinnati, operating manager Braheam Shteiwi said he’s supportive of his staff keeping their hard-earned tips.
“$20-30 for one of these guys every night, at the end of the week, that’s a lot,” he said. “It can make a big difference.”
Shteiwi said he was glad to see politicians focusing on blue-collar workers, but acknowledged there’s still a long political road ahead for it to become reality.
“In the end, it’s going to put more cash in their pockets,” he said. “I think it’s a good idea.”
The plan is high on rhetoric, but many of the details are missing. Neither campaign has indicated how they plan to pay for it.
The Committee for a Responsible Federal Budget estimates it could add $150-250 billion to the national debt over 10 years.
But restaurant workers said a penny saved is a penny earned.
“It would go a long way,” said Feltman.
