The Tipped Wage System Is Failing Us. Removing Taxes on Tips Won’t Save It.

Both major presidential candidates have called for eliminating taxes on tips. But that won’t help most restaurant workers. 

What will? Replacing the subminimum wages that tipped workers make with one fair wage nationwide.

The federal minimum wage for most workers is just $7.25. But for workers who get tips, employers are allowed to pay them $2.13 an hour. If tips don’t raise your hourly pay to at least the regular minimum wage, bosses are supposed to make up the difference — but very often don’t.

I was a bartender in Boston for over a decade. Technically, I was paid $6.75 an hour — the current subminimum in Massachusetts, which is thankfully higher than the $2.13 federal rate. But my coworkers and I made next to nothing anyway.

Like us, the vast majority of tipped workers in America — 66 percent — don’t earn enough to have to pay federal payroll taxes. So eliminating those taxes won’t benefit two-thirds of us at all. 

It would only help the upper earners, like fancy waiters at the fancy restaurants — or millionaire Wall Street types, lawyers, or hedge fund managers who could reclassify their incomes as tips to dodge taxes.

Donald Trump has proposed ending taxes on tips as a clear attempt to pander to tipped workers. But as president, Trump actually gutted overtime regulations and tried to make it easier for our employers to steal our tips. So it’s clear to me he doesn’t really want to help us.

It’s a telling sign that the National Restaurant Association (NRA), which is backed by corporations and wealthy business owners, has embraced Trump’s plan. 

The NRA is constantly looking for ways to get around having to actually pay their workers a full, fair minimum wage like every other industry in America. Their lobbying is the reason the subminimum wage has been stuck at $2.13 for over 30 years in the first place.

Kamala Harris has also embraced ending taxes on tips. But unlike Trump, Harris has also voiced support for ending the subminimum wage. That would mean that my coworkers and I would be paid a full, fair minimum wage just like all other workers in our country — plus get tips on top. 

In that scenario, not having to pay taxes on tips would be meaningful for all of us. 

When employers can pay a subminimum wage, it forces our income to depend on uncontrollable factors — like weather, customer traffic, and tips. 

Even worse, many of my coworkers and I are pressured to tolerate inappropriate customer behavior because our livelihood depends on being likable. This especially harms women and contributes to the restaurant industry’s notoriously high rates of harassment. 

That’s why I’m helping turn out votes for a ballot measure this fall that would end the subminimum wage in Massachusetts and ensure all restaurant workers are paid one fair wage with tips on top. There’s similar legislation pending in 12 more states.

The good news is we know this policy works. 

One fair wage is already law in seven states and two major metro areas (Chicago and Washington, D.C.). And in those places, wages are higher, rates of tipping are the same or higher, and restaurant growth is higher. 

Tipping is so ingrained in our culture that in places like California, which recently eliminated its subminimum wage, customers routinely continue to tip their usual amount — which workers receive on top of the full minimum wage. It’s a win-win solution.

It’s great that politicians are talking about tipped workers. We’re a powerful voting block and we’re invested in voting for meaningful change. Tipped workers see beyond the lies and the pandering and know that one fair wage is the change we need to put more dollars in our pockets.