Some US restaurants and servers oppose Republicans' ‘no tax on tips' budget proposal
'I think there's a huge hole in this concept of 'no tax on tips' because a lot of restaurant workers aren't receiving tips in the first place,' said Elyanna Calle, a bartender in Austin, Texas, and president of the Restaurant Workers United union. 'It's not helping most kitchen workers, and oftentimes those are the people who are being paid the least.'
Advertisement
Tips included in sprawling tax cuts package
For now, making tips tax-free appears to have broad support among lawmakers. Both Trump and his Democratic rival in last year's U.S. presidential election, former Vice President Kamala Harris, campaigned on the concept.
Get Starting Point
A guide through the most important stories of the morning, delivered Monday through Friday.
Enter Email
Sign Up
The House included it in a tax cuts package approved last month. The bill would eliminate federal income taxes on tips for people working in jobs that have traditionally received them as long as they make less than $160,000 in 2025.
The Senate Finance Committee passed a modified version on Monday. Senators capped deductions at $25,000 and want to phase them out for individuals whose income exceeds $150,000. Eligibility would be based on earnings as of Dec. 31, 2024.
Both the House and Senate committee measures would apply through the 2028 tax year. The Finance Committee specified that 'cash tips' qualify but said the term applied to tips paid in cash, charged to credit cards or received from other employees under a tip-sharing arrangement.
Advertisement
Main industry trade group supports tax-free tips
Wary of wading into politics, many restaurant chains contacted by The Associated Press about tax-free tips didn't respond or referred questions to the National Restaurant Association, including Waffle House, The Cheesecake Factory, First Watch and the parent companies of Olive Garden, Applebee's and Chili's.
The National Restaurant Association, a trade organization that represents nearly 500,000 U.S. restaurants and bars, applauded the House's passage of Trump's spending bill and said it wants to see tax-free tips. The association estimates the measure would benefit more than 2 million servers and bartenders.
But the U.S. restaurant industry has more than 12 million workers, including dishwashers and chefs, according to government data. The Independent Restaurant Coalition says the 'no tax on tips' proposal leaves out too many of those workers.
A push to eliminate taxes on service charges
The coalition wants Congress to eliminate taxes on service charges, which are being used to compensate employees at an increasing number of restaurants. Around 15% of U.S. restaurants add some form of service charge to customers' bills, according to the National Restaurant Association.
George Skandalos, a pizza restaurant owner in Moscow, Idaho, was tired of seeing servers count out hundreds of dollars of tips at the end of the night while people in the kitchen scrubbed the floor on their hands and knees. So he started experimenting with different compensation models.
Skandalos tried pooling servers' tips and distributing them but ran into rules preventing that. He tried raising his menu prices and explaining that a percentage of each order was going to employee compensation, but customers didn't understand and kept tipping.
Advertisement
Skandalos now has a gratuity-free policy at his restaurant, Maialina. He charges a 20% service fee that is distributed to all employees and helps pay for benefits like paid vacation and parental leave. The vast majority of customers appreciate the effort, he said.
Skandalos said 'no tax on tips' doesn't acknowledge restaurants like his that are trying to distribute pay more equally. He would like to see service charges exempted from taxes.
'This bill is a very good start in terms of trying to leave more money in people's pocketbooks, but now let's finish what we started and make it a great thing for the restaurant industry overall,' he said.
Tipped workers seek higher wages
But Ted Pappageorge, the secretary-treasurer of the Culinary Workers Union Local 226 in Las Vegas, said restaurants should just pay their kitchen workers more to compensate for servers earning tips.
''No tax on tips' is an opportunity for Republicans and Democrats to deliver something to working class folks,' he said.
Pappageorge wants Congress to take up a separate bill introduced by Nevada Democrat Steven Horsford that would eliminate taxes on tips but also require restaurants to pay workers at least the federal minimum wage of $7.25 per hour. In 43 states, restaurants are currently allowed to pay tipped workers as little as $2.13 per hour.
Yolanda Garcia, a barista at Resorts World in Las Vegas and a member of the Culinary Workers Union, also supports Horsford's bill. Garcia said she makes $33,000 a year, including up to $600 per month in tips. Tips are never guaranteed, she said, but if they were tax-free, it would help make up for that uncertainty.
Advertisement
'It would help me get more groceries. Right now, the price of everything has gone up,' Garcia said.
Calle, the Austin bartender and union leader, said she also benefits from tips, but they're inconsistent. She suspects tipping would decline if the tax-free provision passes, because customers will resent it.
For Calle, the underlying problem that must be solved is low base pay.
'I think that if we continue to make the shift into relying on tips for people, it gives incentives for companies to not raise wages,' she said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
24 minutes ago
- Newsweek
Anti-Trump Protests Update: 'National Day of Action' Planned for July 17
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Another round of national anti-Trump demonstrations is being planned across the U.S. for July 17 under the banner of Good Trouble Lives On, a reference to the late civil rights icon, Congressman John Lewis. Newsweek contacted Good Trouble Lives On for comment via email on Friday outside of regular office hours. Why It Matters On June 14,anti-Trump "No Kings" protests took place in cities across the United States on Trump's 79th birthday, which also saw the president attend a military parade in Washington D.C. to celebrate the 250th anniversary of the U.S. Army. The protests took place in hundreds of U.S. cities, with large-scale gatherings reported in major hubs such as Philadelphia; Los Angeles; Austin, Texas; Portland, Oregon; and New York. According to analysis by pollster G. Elliott Morris, they were attended by an estimated 4 to 6 million people. What To Know Good Trouble Lives On demonstrations are being planned for dozens of American cities on July 17 including the likes of New York, Washington D.C, Chicago, Los Angeles and San Francisco with attendees invited to "March in Peace, Act in Power." The name is a reference to Lewis, a Georgia Democrat and an advocate of peaceful protests, who famously called for "good trouble" during the civil rights era. Anti-Trump "No Kings" demonstrators pictured in Los Angeles on June 14. Anti-Trump "No Kings" demonstrators pictured in Los Angeles on June 14. Jay L Clendenin/GETTY According to its downloadable "Host Toolkit" for organizers, the protests have three main goals. These are demanding an end to "the extreme crackdown on civil rights by the Trump administration," "the attacks on Black and brown Americans, immigrants, trans people, and other communities," and "the slashing of programs that working people rely on, including Medicaid, SNAP, and Social Security." Good Trouble Lives On is being supported by a range of other groups including the 50501 Movement, which also helped organize the "No Kings" demonstrations. The 50501 Movement, short for "50 protests, 50 states, 1 movement" was formed in January 2025 to protest Trump and has been involved in organizing a series of national demonstrations beginning on February 5. A series of "No Kings on Presidents Day" rallies took place on February 17 followed by "Hands Off" demonstrations in April and May criticizing federal layoffs and immigration crackdowns. What People Are Saying Speaking to Newsweek, Lorella Praeli, co-president of Community Change Action, which has backed anti-Trump demonstrations, said: "Look around—Trump and his allies are deploying the tools of authoritarianism: silencing dissent, targeting immigrants, punishing oversight, and even staging military displays for personal glorification. These aren't isolated incidents; they're part of a broader effort to delegitimize democratic norms." On its website, Good Trouble Lives On, which "is a national day of action to respond to the attacks on our civil and human rights by the Trump administration," wrote: "We are facing the most brazen rollback of civil rights in generations. Whether you're outraged by attacks on voting rights, the gutting of essential services, disappearance of our neighbors, or the assault on free speech and our right to protest—this movement is for you. "Trump is trying to divide us but we know the power of coming together." What Happens Next It remains to be seen how many people will turn out for the "Good Trouble Lives On" demonstrations and what the organizers plan next.
Associated Press
35 minutes ago
- Associated Press
Charles O. Scott, African American Millionaire Phi Beta Sigma, UVA Alumnus, and Health Entrepreneur, Receives Unconditional Presidential Pardon from Donald J. Trump
Alexandria, VA June 19, 2025 --( )-- Clinical and Herbal Innovations Inc. announced that President Donald J. Trump has granted a complete and unconditional pardon to its co-founder, Charles O. Scott. The White House issued the official pardon warrant, absolving Mr. Scott of his conviction. Charles O. Scott is a distinguished member of the Phi Beta Sigma Fraternity, Inc. at the University of Virginia, where he was a founding member of the Zeta Eta Chapter, established on April 17, 1974. This period was pivotal for African American students at UVA, and his involvement helped lay the foundation for a chapter that significantly impacted the university and surrounding community. Mr. Scott's personal journey is notable: born into poverty in rural Virginia, he graduated from the University of Virginia and became a millionaire entrepreneur in Alexandria, Virginia, exemplifying remarkable upward mobility. His vision was crucial in founding and leading Clinical and Herbal Innovations Inc. 'We are immensely grateful to President Donald J. Trump for the unconditional pardon granted to our co-founder, Charles O. Scott,' said Dr. John M. Richards, MD, the company's formulator and co-founder. Dr. Richards received a patent for his work on Panoxol. The existence of a United States Patent (US 8,691,295 B2) for the Vasonoxol formula is a significant milestone that confers immense credibility. 'This is a momentous occasion for Mr. Scott, his family, and our entire organization. We have always believed in his integrity and are thankful that he can now move forward with his life and continue to contribute his entrepreneurial talents.' Demonstrating his ongoing commitment to innovation, Mr. Scott registered the trademark, Vasonoxol®. Under this new name, Vasonoxol®, he has rebranded Panoxol, the company's U.S.-patented, doctor-developed formula for healthy blood pressure. Charles rebranded to Vasonoxol, a Clinical and Herbal Innovations Inc. registered trademark, overseen by CEO Mike Williams, Chairman William Dennis, and Chief Science Officer Dr. Bernad Fragomeni. Mr. Scott was honored for being an African American pardoned by President Donald Trump, and in a gesture of gratitude to Donald J. Trump, Clinical and Herbal Innovations Inc., the company Mr. Scott co-founded, has also submitted an application for a trademark of the slogan, 'Making Arteries Great Again.' Vasonoxol® is now available on Amazon, and its official website, Further details from the pardon warrant can be found through the Department of Justice. About Clinical and Herbal Innovations Inc.: Clinical and Herbal Innovations Inc. is a health and wellness company based in Alexandria, Virginia. The company develops and distributes various herbal and clinical products, including the U.S.-patented, doctor-developed formula Vasonoxol®. Media Contact: Latorria Mason, Corporate Secretary Clinical and Herbal Innovations Inc. 206 N. Washington Street, Alexandria, VA 23214. Phone: 1-844-Panoxol. Email: [email protected] For more information on Vasonoxol® and the company, please visit: Websites: YouTube: @Vasonoxol Instagram: @OfficialPanoxol Social Media: YouTube: @Vasonoxol Instagram: @OfficialPanoxol Amazon Store: Contact Information: Clinical and Herbal Innovations Inc Latorria Mason 1-844-724-6965 Contact via Email Read the full story here: Charles O. Scott, African American Millionaire Phi Beta Sigma, UVA Alumnus, and Health Entrepreneur, Receives Unconditional Presidential Pardon from Donald J. Trump Press Release Distributed by
USA Today
an hour ago
- USA Today
As a gay man, I'm finally flying a pride flag. I don't know what took so long.
As a gay man, I'm finally flying a pride flag. I don't know what took so long. | Opinion Having witnessed one attempt after another by the current administration to erase LGBTQ+ people, I'm no longer OK with being a quiet gay. Show Caption Hide Caption WorldPride marched through DC for Pride month, in defiance of Trump WorldPride, The global festival promoting LGBTQ+ visibility, held it's anniversary parade in D.C. I'm embarrassed to admit that I've never bought a pride flag, much less displayed one, in my 60-some years. I've been gay for all those years, and openly, publicly so for almost all of them, but have never flown the rainbow flag. But recently, lost in thought on my front lawn here in a small town in central North Carolina, I looked up at the American flag I fly from the front porch. Five years ago, I wrote why I decided to hang the Stars and Stripes, reclaiming it as a flag of all the people, not just some. I remember thinking I was making a statement about inclusion, equality under the law and, yes, patriotism. No one, no political party, should hold the U.S. flag hostage. When people ask me where I live, I proudly tell them, 'It's the house with the Stars and Stripes. You can't miss it.' A friend's flag helped me find a reason to show my pride Then, my neighbor and friend Pier Carlo Talenti, also a gay man, posted a photo of his charming cottage with a big pride flag hung on the front porch, seeming to wave at anyone passing by. He wrote, 'For the first time ever, I'm flying a Pride flag.' And then he went on to tell us why. Talenti was angry that the Department of Defense had decided to rename the USNS Harvey Milk, erasing the gay civil rights leader from the Navy vessel that has borne it since 2021. Milk was assassinated in 1978 because of his sexual orientation; Talenti was sure the announcement of the change had been made specifically to coincide with Pride Month. 'So petty and hateful,' he wrote. He added, 'I need my neighbors who … represent a broad political spectrum (to understand) that there's a gay man living and working here and making their community better. America belongs to all of us.' In just a few hours, dozens of his friends and neighbors had commented, all of them echoing this one: 'I support this message.' A friend in Washington, DC, added, 'Maybe a few of your friends will even join you.' Well, it didn't take long. A Louisville friend posted, 'We've never flown flags either until now. We've got one, too.' That's when I went online and purchased what's known as the 'Progress Pride Flag," which includes five half-size stripes in an arrow shape representing trans and nonbinary individuals, marginalized communities of color and those living with HIV/AIDS on top of the traditional rainbow flag. That particular flag makes a clear statement in support of everything the Trump administration has tried to erase. Opinion: I wrote a book on finding joy. Even now, it's easier than you think. Trump administration trying to erase LGBTQ+ community President Donald Trump and Republicans have made their own statement on the LGBTQ+ community. It started with Trump's anti-transgender attacks, central to his reelection campaign in 2024. Once back in the Oval Office, he called on Congress to pass a bill stating that there are "only two genders' and signed an executive order in January halting federal funding for hormonal and surgical intervention for trans minors. Erased. Anti-trans decision: Supreme Court turned its back on trans youth. Our community never will. | Opinion Then, Trump fired members of the Kennedy Center Board of Trustees, became chairman and canceled all the events planned to celebrate LGBTQ+ rights for June's World Pride festival in the nation's capital. Erased. Not having done enough damage, Trump has now banned transgender people from serving in the military. Defense Secretary Pete Hegseth announced that he'd scrub the name of the USNS Harvey Milk, who served as a Navy operations officer on rescue submarines during the Korean War then went on to become the first openly gay man elected to public office in California. If all that wasn't enough, the administration announced plans to end a suicide hotline explicitly created for LGBTQ+ youth. Why haven't I flown a pride flag before? But it made me wonder why I had never done this before. I have been writing about LGBTQ+ issues for decades: books, columns, public talks. I'm no shrinking violet (one of the seven colors in the rainbow flag, and one of many more on some of the newer variations). My identity is no secret. Still, I had my reasons for not identifying my house. I live not far from Ku Klux Klan country, and in recent years KKK members have visited our town, white robes flowing and Confederate flags flying. They've made threats. They've left abhorrent literature on people's front porches. A 2019 invasion frightened many in town, especially my Black and Brown neighbors, who witnessed a hate they thought belonged to another time. I'd been fearful, too, and did not want my house to become a target. As a journalist, I'd already faced a home invasion from a reader who stalked me online for months, finally deciding to confront me by trying to break down my front door. This was in 2018, just before five journalists were killed in Annapolis, Maryland. There was another reason, too, which has only congealed for me. Over the years ‒ decades ‒ I'd changed. At one time, I had enthusiastically and regularly marched in San Francisco Pride, but I hadn't participated in years. I'd once lived in the Castro District (one of this nation's gay meccas), but I'd moved to the suburbs and then to North Carolina. I had once been single, but I'd married my husband and committed to our two dogs. My god, I even got rid of the flashy fake diamond stud that I'd sported for many years. Was it just age, my older self not being as out there as my younger one? Or had something else happened, and I just wasn't 'that kind of gay' anymore? I wasn't even sure what that meant, but it seemed I'd become the kind of gay who didn't hang a pride flag from his front porch. Well, I am again. Like Talenti and other friends, it's time for me to step it up. Having witnessed one attempt after another by the current administration to erase LGBTQ+ people, I'm no longer OK with being a quiet gay. It's time to be a more visible and vocal member of our community ‒ to be counted and to be seen. I've said for many years that I refuse to let fear drive how I live, not realizing I'd already succumbed in this very important way. I think of others in the LGBTQ+ community who live lives at much greater risk than I do, thanks to their sexual identity and the color of their skin, and I know that I need to step into the light on behalf of those who must still live in the shadows. That's why I've hung the pride flag on my front porch, for everyone to see. It's a beacon in these dark times. Now, when people ask me where I live, I tell them, 'It's the house with the pride flag. You can't miss it.' Steven Petrow is a columnist who writes on civility and manners and the author of seven books, including 'The Joy You Make' and "Stupid Things I Won't Do When I Get Old." Follow him on Threads: @
