Run on What You Want Done

If there’s a lesson to be learned from Kamala Harris attempting to appropriate Donald Trump’s idea for abolishing taxes on tips, it’s this: Run on what you want to see done.

Eliminating taxes on tips is highly debatable as policy. On the upside, it’s always better to give people tax relief that incentivizes them to work more, rather than giving them handouts. It also eliminates taxes on a kind of income that is administratively hardly worth the cost of enforcement. It puts citizens who work for tips on an equal basis with illegal immigrants who collect tips and don’t file income tax returns. And it restores the de facto status quo: tips traditionally went underreported because they were in cash, which has been undermined as more people shifted to paying bills (and the tips that come with them) electronically. On the downside, it treats some income and some workers unequally, it adds further exploitable loopholes to the tax code, it could incentivize employers to cut wages in favor of tips, and it’s less economically beneficial than other forms of tax relief that could be crowded out by the “cost” to the government in foregone tax revenue from ending the tip-tax. One could tell an even more skeptical story about Trump’s proposal to remove taxes on Social Security benefits. This is before you even get into questions about how Harris is using the cover of a me-too proposal to smuggle in different things than what is in Trump’s proposal.

About the Author

Dan McLaughlin

Dan McLaughlin is a senior writer at National Review Online and a fellow at National Review Institute.

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If there’s a lesson to be learned from Kamala Harris attempting to appropriate Donald Trump’s idea for abolishing taxes on tips, it’s this: Run on what you want to see done.

Eliminating taxes on tips is highly debatable as policy. On the upside, it’s always better to give people tax relief that incentivizes them to work more, rather than giving them handouts. It also eliminates taxes on a kind of income that is administratively hardly worth the cost of enforcement. It puts citizens who work for tips on an equal basis with illegal immigrants who collect tips and don’t file income tax returns. And it restores the de facto status quo: tips traditionally went underreported because they were in cash, which has been undermined as more people shifted to paying bills (and the tips that come with them) electronically. On the downside, it treats some income and some workers unequally, it adds further exploitable loopholes to the tax code, it could incentivize employers to cut wages in favor of tips, and it’s less economically beneficial than other forms of tax relief that could be crowded out by the “cost” to the government in foregone tax revenue from ending the tip-tax. One could tell an even more skeptical story about Trump’s proposal to remove taxes on Social Security benefits. This is before you even get into questions about how Harris is using the cover of a me-too proposal to smuggle in different things than what is in Trump’s proposal.