Nevada Lawmakers Propose Tax-Free Tips Legislation

Both major presidential candidates are advocating for eliminating federal taxes on tips, a policy initially proposed by former President Donald Trump. This plan aims to assist tipped workers, particularly in Nevada's hospitality sector, but analysts warn it may result in reduced customer tipping and could pressure employers to avoid wage increases. Democratic Rep. Dina Titus supports the tax cut but insists it must be paired with an increase in the federal minimum wage to ensure workers benefit. Meanwhile, Rep. Steven Horsford has introduced the Tipped Income Protection and Support (TIPS) Act, which seeks to exempt $112,500 of tips from taxation and abolish subminimum wages for tipped workers. Critics fear that without safeguards, the tax change could be exploited by higher earners declaring their income as tips, leading to significant revenue losses for the government. As discussions continue, the implications of these proposals remain contentious and complex.