- United States
- Calif.
- Letter
The Tip Tax Termination Act aims to provide financial relief to workers in tipped industries like cosmetology, hospitality, and food service by excluding up to $20,000 in tips from being subject to federal income and employment taxes for 5 years until the end of 2028. This policy recognizes the economic challenges faced by tipped employees and seeks to increase their take-home pay. While the proposal offers temporary tax savings, it does not address the underlying issue of inadequate base wages in tipped professions that necessitate reliance on gratuities. A comprehensive approach reforming minimum wage laws and employment practices in these industries may be needed for long-term, sustainable solutions. Nevertheless, this bill presents an opportunity to assist workers struggling with rising costs by allowing them to keep more of their hard-earned tips.