The Biden administration has publicly supported the “No Tax on Tips” policy, a proposal initially advocated by Donald Trump and recently reiterated by Kamala Harris at her Las Vegas campaign rally. During a White House briefing, Press Secretary Karine Jean-Pierre confirmed President Biden’s support for eliminating taxes on tips for service and hospitality workers.
When questioned if Harris derived the idea from Trump, Jean-Pierre dismissed the query with a laugh, stating, “What I can say is this President, this Vice President, have always had the backs of the working people.”
Trump has promoted the “No Tax on Tips” policy since June, predating the endorsement by Harris and the Biden administration. During her Vegas rally, Harris emphasized, “We will continue to fight for working families, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.” A Harris campaign official later noted that the proposal would require congressional approval and suggested the tax-free tip policy would be subject to an income cap.
Despite the endorsement of this policy, the Biden-Harris administration’s IRS introduced the “Service Industry Tip Compliance Agreement” (SITCA) in February 2023. The initiative aims to enhance tip reporting compliance by leveraging technological advancements in point-of-sale systems and electronic payment methods. The program also involves “monitoring employer compliance” and implementing employee tip reporting policies aligned with tax laws.
Trump criticized the Harris campaign’s adoption of the idea, asserting on Truth Social, “The difference is, she won’t do it, she just wants it for Political Purposes! This was a TRUMP idea – She has no ideas, she can only steal from me. Remember, Kamala has proposed the LARGEST TAX INCREASE IN HISTORY – It won’t happen.”