Abstract
Presidential campaigns are marked by heated debates, constant controversy, and opposing views about current problems and possible solutions. Rarely do they involve anything resembling agreement between candidates. During dueling campaign events in Nevada, however, both candidates Donald Trump and Kamala Harris suggested that tips received by employees should no longer be taxed. The proposals are widely seen as a way of courting the large population of service workers in Nevada, a key battleground state in the 2024 presidential race. There are many factors to consider when evaluating these promises made by both candidates. How genuine are they, and do they have a chance of becoming a reality? How much tax revenue will be lost, and how will it be made up? Is it the most effective way to provide a tax break to lower-income employees, and will it alienate lower-income employees who are not in tipped work? These questions are complex and will take time to answer. What is clear, however, is that eliminating taxes on tips will incentivize this compensation practice and increase the number of individuals who depend on tips to make a living. But, is that a good thing?