Biden supports cutting taxes on tips, White House says

By Costas Pitas and Trevor Hunnicutt

WASHINGTON (Reuters) – U.S. President Joe Biden supports the idea of eliminating taxes on tips for service and hospitality workers, the White House said on Monday.

“Absolutely,” said White House spokesperson Karine Jean-Pierre, asked at a briefing if Biden would sign legislation doing so were it passed by Congress. “This is something that the president supports. He supports eliminating taxes on tips for service and hospitality workers,” as well as raising the minimum wage.

The statement came after Vice President Kamala Harris, the Democratic presidential candidate, said in Nevada on Saturday that she supported eliminating taxes on tips, taking a similar position to her rival Donald Trump in an effort to win over service workers.

That group is a large and politically influential constituency in the state, which is expected to be closely contested in the 2024 election.

Support for the policy marks a rare area of agreement between the two major party’s presidential candidates.

Harris’ version of the proposal – exempting tip income from federal income taxes and raising the minimum wage – could increase deficits by $100 billion to $200 billion or more over 10 years, according to the Committee for a Responsible Federal Budget.

Some 2.2 million Americans worked as wait staff in 2022, according to the U.S. Labor Department, many drawing some of their income through tips.

Trump, who told a rally in Las Vegas in June that he would seek to end taxation of income from tips, accused Harris of stealing his policy proposal.

“Kamala Harris, whose ‘Honeymoon’ period is ENDING… just copied my NO TAXES ON TIPS Policy,” Trump said on his Truth Social app. “The difference is, she won’t do it, she just wants it for Political Purposes!”

A Harris campaign official said her proposal would require legislation to be passed by Congress.

“As president, she would work with Congress to craft a proposal that comes with an income limit and with strict requirements to prevent hedge fund managers and lawyers from structuring their compensation in ways to try to take advantage of the policy,” the official said.