Trump confirms his promise to abolish taxes on tips in US
Donald Trump (photo: Getty Images)
On Saturday, January 25, US President Donald Trump held a rally in the state of Nevada. Speaking in Las Vegas, a city dominated by the hospitality and service industries, he reiterated his promise to eliminate taxes on income earned from tips, reports Bloomberg.
"So if you’re a restaurant worker, server, a valet, a bell hop, a bartender, one of my caddies or any other worker relies on tipped income. Your tips will be 100% yours," Trump stated.
As Bloomberg reports, this proposal is one of many tax initiatives that the newly elected US president built his campaign around. He also introduced ideas such as reducing the corporate tax rate, eliminating taxes on Social Security payments, exempting overtime pay from taxation, and increasing the cap on state and local tax deductions.
"All on top of renewing expiring breaks from his landmark 2017 package," the publication added.
Donald Trump claims that his tax changes will pay for themselves by driving US economic growth and that his promise to impose comprehensive tariffs on foreign goods will generate additional revenue.
At the same time, the US president’s tax program comes with a hefty price tag. Extending the expiring tax breaks is estimated to cost $4.6 trillion, leaving lawmakers likely facing tough decisions as they consider approving a broader tax package.
Approximately a week ago, Scott Bessent, Donald Trump’s nominee for US Treasury Secretary, warned that the country could face an economic disaster and a historic rise in taxes.
He stated that the US is heading toward economic calamity if the sweeping tax cuts for individuals and businesses are not extended by the end of 2025.
