By C. Jarrett Dieterle | Guest Post | Discourse Magazine
Less than a week into his second term, President Donald J. Trump vowed from the stage of a presidential rally in Nevada that “We’re gonna get it for you—no tax on tips.” He reiterated the pledge Tuesday night in his address to Congress. If these seem like déjà vu moments – they are!
On June 9, 2024, then-presidential candidate Donald Trump grabbed media headlines when he spontaneously declared during a Nevada campaign rally that eliminating taxes on tips was the “first thing” he’d do upon taking office. (Vice President Kamala Harris—in a rare moment of bipartisan unity—also wound up endorsing the idea.)
But what many dismissed at the time as Trumpian off-the-cuff bluster is now looking like a very real possibility.
“If you’re a restaurant worker, a server, a valet, a bell hop, a bartender, one of my caddies,” said Trump, “your tips will be 100 percent yours.” Members of Congress have introduced a bevy of different bills seeking to accomplish this end, all of which vary in flavor but not in ethos. Viewed from the vantage point of government officials and wonks in Washington, D.C., no-taxes-on-tips received mixed reviews at best as a public policy concept. But it hit the bullseye in terms of political impact.
That’s because the businesses that comprise the restaurant industry—and the (often tipped) employees who work within them—are the veins through which the lifeblood of America’s middle class runs. These businesses also provide America’s formidable economic engine with much of its fuel, leading some commentators to suggest that “as restaurants go, so goes the economy.”
In addition to providing jobs and generating economic benefits, restaurants serve yet another irreplaceable function in the American landscape: that of a cultural hub and communal gathering place. From Tuesday trivia at the local brewery to Sunday Bible study at the neighborhood diner, food and beverage spots are in many ways the rock upon which modern American civil society is built and sustained.
For its part, the restaurant and hospitality sector has shown incredible vitality coming out of the COVID-19 pandemic—a testimony to the industry’s resilience after many predicted its demise. Despite its admirable buoyancy, the humble restaurant faces substantial and even potentially existential challenges in the years ahead.
