Photo-illustration by Newsweek/Getty/Americans Back Trump on Tips
By Aliss Higham
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The majority of Americans support Donald Trump's pledge to end taxes on tips, a new poll has found.
Polling conducted exclusively for Newsweek by Redfield & Wilton Strategies showed that 67 percent of Americans do not believe tips given to service workers should be taxed. Republican nominee Trump, as part of his 2024 presidential campaign, has pledged to stop tips being subject to taxes if he wins the White House in November. Under the current law, all cash and non-cash tips received by an employee are classed as income and are subject to both income and payroll taxes.
The survey, conducted on July 29 among 1,750 eligible voters in the U.S., found that 19 percent believe tips should be taxed, while 14 percent said they didn't know. Among those surveyed, women were very slightly more likely to support exempting tips from taxes, with 67 percent agreeing, compared to 66 percent of men.
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Millennials (70 percent) and Gen Xers (74 percent) were more likely to be in favor of abolishing taxes on tips, while Gen Z (59 percent) were the least likely. Republicans (68 percent) were slightly more likely to agree with Trump's idea than Democrats (65 percent).
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"To those hotel workers and people who get tips, you are going to be very happy, because when I get to office we are going to not charge taxes on tips, people making tips," Trump said in June at a rally in Nevada, the state with the highest concentration of service workers in the country. "We're going to do that right away, first thing in office."
Republicans have backed the pledge, with Texas Senator Ted Cruz introducing a bill that would amend the Internal Revenue Code "to eliminate the application of the income tax on cash tips through a deduction allowed to all individual taxpayers.
"I think it's actually a very smart idea. The men and women who rely on tips for their earnings, they are working their tails off," said Republican Senator Ron Johnson of Wisconsin, according to The Associated Press. "That's very good, targeted tax reform right there."
On June 16, the nonpartisan Committee for a Responsible Federal Budget released a report that estimated exempting all tipped income from federal income and payroll taxes would reduce federal revenues by $150 billion to $250 billion over 10 years on a static basis, "and could reduce revenue significantly more once behavioral effects are incorporated."
"Although the Trump campaign has not outlined its proposal in detail, we assume it would make tip income exempt from federal income and payroll taxes," the report reads. "On a static basis, we estimate this would reduce revenue by $150 to $250 billion between Fiscal Year (FY) 2026 through FY 2035, depending on how fast tip income grows and over what distribution of income it is concentrated."
Trump has not clarified whether his pledge would remove only federal income taxes from tipped income or whether this would include payroll taxes, which fund Social Security. When Newsweek contacted Trump's campaign team for clarification, a spokesperson responded: "President Trump was the first person to call for no tax on tips. Now everyone is copying him. The difference is that he'll actually do it."
Howard Gleckman, senior fellow at the nonpartisan Urban-Brookings Tax Policy Center at the Urban Institute, has argued that Trump's tip exemption plan could "benefit few tipped workers and hurt many."
"Tax-free tips might help a relatively small number of waiters at high-end restaurants," he said. "And they could reward hotel owners such as Trump by slowing efforts to raise the minimum wage for tipped workers. But many tipped workers make so little income that they already pay little or no income tax."
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