Workers reject Trump 'pandering' on tipped wages—but have message for Democrats too

A leading labor advocate on Monday dismissed former U.S. President Donald Trump's pledge to eliminate taxes on tips as "pandering" to working people and said the promise doesn't address the fact that low-wage workers need a living base wage to afford necessities—but warned that the Republican's comments reveal a shortcoming in the Democratic Party's economic justice record.

As Saru Jayaraman, president of One Fair Wage, told Common Dreams, Trump's pledge at a rally in Nevada on Sunday should be seen as "a call to Democrats who have yet to come out at any level, calling for what workers really do need this year: a living wage."

In Las Vegas on Sunday, the presumptive Republican presidential nominee told a crowd that the "first thing" he would do if elected to a second term would be ending taxation on tips, which the Internal Revenue Service (IRS) currently taxes as part of workers' regular income.

"For those hotel workers and people that get tips, you're going to be very happy," said Trump. "Because when I get to office, we are going to not charge taxes on tips... It's been a point of contention for years and years and years."

Jayaraman said that while workers complain about taxed tips to her organization—which includes nearly 300,000 restaurant and service workers and advocates to end all subminimum wages in the U.S.—eliminating those taxes would not address the current affordability crisis, which has been reflected in numerous polls that have shown the top concerns among voters to be the cost of housing and other essentials.

"The restaurant industry has used tips for 150 years in place of what people need, which is a stable, base living wage with tips on top," Jayaraman told Common Dreams. "It is helpful, for sure, to not have your taxes tipped, but that is a red herring. That should be on top of what workers really need."

"It is helpful, for sure, to not have your taxes tipped, but that is a red herring. That should be on top of what workers really need."

Jayaraman pointed out that the Republican Party does not "even believe in a minimum wage, let alone a livable wage."

Dean Baker, senior economist of the Center for Economic and Policy Research (CEPR), suggested working-class voters should not be fooled by Trump's unserious comments.

"I realize that Trump doesn't believe in thinking, but exempting tips from taxes will just encourage more employers to expect workers to get more of their pay in tips," Baker said. "This is horrible for workers, since they need a regular paycheck. They shouldn't have to depend on customers feeling generous. But I'm sure this is too complicated for Donald Trump."

In Nevada, Trump's comments did not sway the Culinary Workers Union Local 226 and Bartenders Union Local 165 , which represents 60,000 workers in the battleground state, toward the former president, who was convicted on 34 felony counts of falsifying business records on May 30.

"Relief is definitely needed for tip earners, but Nevada workers are smart enough to know the difference between real solutions and wild campaign promises from a convicted felon," said Ted Pappageorge, secretary-treasurer for the culinary workers' union, in a statement.

Despite what critics recognized as overt "pandering" to working people on Sunday, Trump's campaign has repeatedly emphasized how his tax policy plan, if reelected, would help the wealthiest Americans and corporations.

In May, the former president told oil executives that if they help raise $1 billion for his campaign it would be a "deal" because of what they would save on taxes if he were to be reelected. Trump has promised to extend his 2017 tax cuts, which disproportionately benefited corporations and the wealthy.

President Joe Biden has said he would allow Trump's tax cuts for people earning over $400,000 per year to expire if he wins a second term. He has also called for a wealth tax on individuals with more than $100 million in assets.

On social media, Trump said after his rally on Sunday that Biden has tried "to TAX more and more of [workers'] Tips, even hiring 88,000 IRS Agents to collect!"

The increased IRS funding supported by Biden and included in the 2022 Inflation Reduction Act has actually been aimed at cracking down on wealthy tax evaders; last month the IRS said its audit rate for people earning more than $10 million per year is expected to go up 50% by 2026.

Jayaraman warned that despite Biden's efforts to introduce more fairness into the tax code, voters have not heard enough from the federal government about working people's struggles to afford essentials like groceries, housing, childcare, and transportation.

"We've not seen most federal folks run on what people really are needing," said Jayaraman. "So if you look at the polls of youth and black voters and Latinx voters, every poll has the cost of living, economy, and jobs with living wages as the top issues. And... the response we're getting is, 'Well, the economy is great. Stock market's up, GDP is up, unemployment is down. People just must not understand the economy.' And I think who's not understanding is [elected officials] who look at those polls and don't understand that what workers are talking about is not the economy, but their economy, their ability to pay for eggs and gas and housing right now."

To combat Trump's pandering, Jayaraman added, Democrats must run on "what people are prioritizing right now, which is their wages and their ability to pay for things."

Jayaraman urged Democratic lawmakers to show that they are prioritizing living wages by supporting legislation that would include raises for tipped workers in states including Ohio, Arizona, Massachusetts, and Michigan.

Elected officials "could go to these states and say, 'You can vote yourself a raise this year, and we support it,'" said Jayaraman. "'Yes, we've done some things, but we know you're struggling and... you have to reelect us to get the job done. And in the meantime, you can go vote yourself a raise this November in these states.' That should be the message."