Earlier this week, Democratic presidential candidate Kamala Harris stunned many by following in Donald Trump's footsteps and championing a "No Taxes on Tips" plan. As Eater reporter Amy McCarthy explains, these plans essentially exempt restaurant workers (and other tipped employees) who make the tipped minimum wage of $2.13/hour from paying federal income taxes.
On paper, it's a catchy phrase that seems to cater to the needs of workers making a subminimum wage — and for those eligible, a few extra thousand dollars in your pocket at the end of the year is nothing to sneeze at. But critics of the plan point out that any adoption of "no tax on tips" would have much less of an impact on low-income workers than one would expect: a result of the intricacies of the U.S. tax system, but also the problematic way the restaurant industry compensates its workers to begin with.
Many argue that instead of advocating for "no tax on tips," political energy would serve far more people by going back to basics: simply raising those minimum wages altogether. (Sixteen states still use that $2.13 tipped minimum wage, which has not changed since 1991; only seven states ensure that tipped workers receive the state's standard minimum wage in addition to any additional tips.) And as we've covered for the past decade-plus, the restaurant industry is often at the forefront of that charge. The Fight for $15 movement has been arguing for a higher minimum wage since 2012, engaging in worldwide protests demanding a living wage from fast-food chains. One Fair Wage was founded in 2013 with the goals of abolishing the tipped minimum wage altogether, and it's seen measurable success on the individual and local level, with cities like Chicago recently adopting local measures.
Some may want to extricate labor policy and politics from the act of going out to eat: Because yes, we dine out not just for sustenance but to seek out comfort, or pleasure, or escapism, or insert your emotional void of choice here. But caring about where you eat should also mean caring deeply about the people — the human labor — behind that experience, and wanting for them not just a basic cost of living but the ability to attain and appreciate the same comforts and pleasures they put their labor into creating.
This November, measures asking voters whether or not they want to increase their state's minimum wage will hit the ballot in Alaska, California, Missouri, and Massachusetts; the latter is a measure that would gradually abolish the state's tipped minimum wage by 2029. In Arizona, in addition to a minimum wage increase, a ballot measure will be put to voters to see if they want to effectively decrease the state's tipped minimum wage by 58 cents an hour. Several state ballots feature initiatives that guarantee workers more sick leave. As this election season ramps up in full force, we'll continue to chronicle how proposed policies and measures — including Harris's just-announced corporate price-gouging ban — could affect the folks who keep the industry humming. Stay tuned.
— Erin DeJesus, Eater executive editor
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