I'm shocked that the bill as voted (link) is not loaded with pork.
It does limit the "tax free" portion to a $25k deduction, though. I know servers who make 50k a year. So they'll still be taxed or under report.
this post was submitted on 21 May 2025
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I'm noticing a weird tax cliff. Someone earning $149,999 (approximately; I didn't look up the exact amount) qualifies, and someone earning $150,001 is excluded entirely. So that mythical thing where earning more money can be worse for you, that is almost never a real thing.... it's actually a thing here.
That's kinda fucky, but idk how many people that could actually impact.
The especially dumb thing is this is for cash tips reported for taxation, so they can just underreport if/when they expect the limits to be an issue.
Plus the tax deduction cap is a hard value without any callout to the treasury department to modify the cap as inflation grows. So if we hit a hyperinflation scenario, a $25k cap won't mean shit. Congrats on getting a free hotdog's worth of tax writeoffs.
So the earning limit is indexed but the amount you can claim is not. Somehow half idiocy is much worse than full idiocy.
How is this fair to wage/salaried workers? Why not eliminate taxes (income and payroll both) up to $60k income?
I would suggest it's more like a gift, which is only taxed after an obscene amount.
Also, frankly I'd suggest not looking at it like it's unfair to give this to them and instead look at it more like, good for them, now how can we help hourly and salaried workers? I'm not going to punch down at service workers, myself.
There was talk of not taxing overtime (although the details of the plan are such garbage that it wouldn't actually help very many people). Something like that might help hourly workers similarly.
Salaried workers and workers like myself who are only nominally hourly ( the expectation is that I will book exactly 40 hours every week) are still left out, but I'm doing alright and would be happy to see others taken better care of first.
I'm suspicious of this tax "cut", why are Republicans supporting this when they hate the working class?. I think it's just for optics, in reality it doesn't change much for most people.
Tips are a small business kulak way to depress the wage they're paying. I see it as cynical support to keep the minimum wage down and introduce tipping into more retail jobs.
The bill explicitly states that the secretary of treasury may declare new jobs as "traditionally tipped". So not only do tips enjoy legal protection but this will now be used as an anchor to prevent those industries from ever paying reasonable wages.
I understand your skepticism. In Michigan they are proposing to exempt seniors (70+) from property tax, which seems good to me, but I'm suspicious as hell that it's a Republican proposing it.
Could just be it's a gimme to their base, but I'm suspicious it's more nefarious.
It's to prime the voters to vote a specific way. I lived in Texas for some time and the state constitution was a total fucking mess that had to be amended by ballot measure.
The pattern was like this:
- Tax break for literally 3 widows of veterans who died in this one specific way. OH WONT SOMEONE THINK OF THE POOR VETERAN WIDOWS!? (vote yes because you're a sucker)
- Now that you've got that pen over the YES button - click "YES" here! This extremely convoluted wording tells you (incorrectly) that by voting yes you will make the big bad government get out of the way of small businesses (by creating a new office and giving that personal crony friend of the governor dictatorial powers over which small businesses win and lose to extract bribes and force loyalty)
- bullshit that should be a legislators job
- bullsiht that should be a legislators job
- Dont you just hate government officials tromping all over your land do do their job? You should obviously vote YES on this one because otherwise mean ol G man will not be able to use your land in extremely rare circumstances that only happen to people with tens of thousands of acres and you feel for that person because you're wearing your constitutionally mandated Cowboy hat and boots that stand in for RealID
- Now that your pen is over YES - here's another amendment that is so badly worded you don't know what the fuck it does and you might as well just click YES so you can move on with your life! This amendment would allow billionaires to dam rivers to make their own personal recreational lakes. Fuck the people downstream!
Exempting the people who own most of the property from having to pay property tax is a great way to bankrupt schools and fire stations...
Do 70+ year olds own most of the property? I don't know the proportion of property owned by 70 year olds. You could be right.
My personal experience is that people are transitioning to assisted living around that time. Also by keeping the property owned instead of allowing it to be moved to a trust, that has inheritance tax implications, and it also is going to require the property to be sold and that money all spent before medicaid will cover a nursing home.
It's complicated and interacts with a number of other things going on, which is why I'm struggling to understand all the implications.
It's literally part of their wage. The restaurants pay them less than the normal minimum per hour because they are tipped employees.
I'm afraid I'm missing your point. Are you responding to the fact that it's more like a gift? It was an analogy not a perfect 1:1 mapping. This doesn't change anything about my response.
My point is is it's not a gift if it's basically socially required for customers to directly pay the workers their fair share of their wage (which decreases the amount of payroll taxes the employer owes)
Okay. Look, we could dig into the nuances, but likening it to a gift was only to invoke the precedent of not taxing cash gifts, but if you don't like the analogy then don't worry about the precedent.
Either way, the point is that service workers are paid shit, even with tips, and I'm not going to begrudge them some tax savings. I have frequently gone out of my way to tip in cash just to enable them to do so.
Really they're pretty much just recognizing the reality of most small shops that I've ever known. At least when tipped in cash I've never known one to care to register and tax tips. Maybe that's changed with people shifting so much to cards and apps now, and some big places, by third hand accounts, are more twitchy about 'those are the rules'.
Yeah, but if that's the reasoning, this bill does nothing. A tax deduction just reduces your taxable income. So you can volunteer to report your cash tips in order to not pay taxes on them. Or continue to not report and also not pay taxes. Or just report $25k. They all lead to the same tax burden.
It's for show, 'he helps the little people!' while the actual deductions are all funneled to the top.
Placate the stupid, greedy masses and setup an easy, tax free way to pay sex workers and launder money.
If Ted Cruz is praising it, I don’t know…