Three Tax Ideas
Congress is back in Washington this week, and they'll soon be starting to put some actual numbers in their aspirational budget. This is going to involve a whole lot of intraparty struggles for Republicans, as different factions draw red lines on different issues. They've set an optimistic timeline for finishing, but it remains to be seen whether Republicans will be able to agree on all of the details in time to meet that schedule.
There are a lot of moving parts to their plans, and we'll doubtlessly have a chance to examine them all as we progress, but here at the start of the process I'd like to address three of their tax proposals in a rather ideological way. Two of them actually sound like good ideas, which is rather surprising (for me), seeing as how they're coming from the Republican Party. I'm not going to get into the much larger issue of the GOP's overall tax-cutting strategy here (again, we'll have plenty of time to talk about that in the coming days), choosing instead to focus today just on three campaign promises made by Donald Trump.
All three are new ideas, and all three are ideological in nature. They're all fairly radical in terms of how Congress usually changes the tax system, because they won't merely change tax rates in some marginal way -- they'll change how people do their taxes as well. While campaigning, Trump promised to completely eliminate income taxes in three big areas: tips, Social Security payments, and overtime pay. These would be much more fundamental changes than just lowering tax rates because these three ways of making money would essentially no longer qualify as income.
Tips
This was the first of the three promises Trump made while campaigning. Kamala Harris immediately seconded the idea, meaning it could wind up being one of those rare things that actually does have some truly bipartisan support.
Tips are a royal pain, when it comes to income taxes. Ask any barista or waitress, they'll tell you. People in certain service industries can even be paid a lower minimum wage, since it is expected that a large portion of the money they make will come from tips.
To be fully compliant with the law, if you earn tips at your job, you are supposed to keep a ledger or spreadsheet where you log in every single day's tips, and then add it up at the end of the year and include it on your income taxes. This, obviously, is a huge chore. Eliminating income taxes on tips wouldn't just give servers a break financially, it would also be a whole lot less hassle.
What is a tip, at heart? It is money given in appreciation for some service another person has provided. There are a lot of different professions where tipping is a big factor (restaurant servers, bartenders, valet parking, limo/taxi driver, maids, delivery service, yard workers, doormen, babysitters, masseuses, ecdysiasts, etc., etc.), so this would mean a whole lot less paperwork for millions of people. But is a tip income? If I tip a waiter, am I that person's employer? No, not really. What a tip is, essentially, is a gift. If I appreciate a service done for me, then I give the person a little money in appreciation for that service. This is over and above the actual cost of the service itself, it is merely my way of telling them: "Good job! Thanks!" in a monetary way.
But small gifts are not supposed to be taxable income. Up to a certain level each year (currently $19,000 for this tax year), gifts are excluded from taxes. If a relative of yours sends you a check for $19,000 (or less), you won't have to pay any income taxes on it, for example. So why should tips be considered taxable income? They are nothing more than a series of gifts a person working certain jobs gets from the people they interact with. So why should they be taxed at all?
Ideologically, it thus makes perfect sense to eliminate income taxes on tips. More to the point, it makes a whole lot of political sense as well. By eliminating tips, you will not only boost the income of some of the hardest working Americans there are, you will also be eliminating a paperwork headache for them as well. It would be an enormous change for people who regularly get tipped.
It also would be the cheapest of the three ideas, costing (by one estimate) between $100 billion and $550 billion over the next 10 years.
Social Security payments
There's also a strong ideological argument to be made for making Social Security payments tax-free as well. After all, you receive this money from the government, so why should they want to claw some of it back at the end of the year? That doesn't make much sense.
Social Security payments go to everyone who worked and survived long enough to retire. For some people, Social Security payments are a small part of their income in their retirement because they have done well enough for themselves that it is merely icing on the cake of their other investments and retirement funds. But for millions of people, Social Security is all they've got -- it is their entire retirement income. Living on such a fixed income is tough, so having taxes taken out of it is more than just an annoyance, it eats into the money they need to survive. Having all Social Security payments be tax-free would be a welcome change for millions of seniors.
Politically, this seems to be a big winner as well. Especially since older Americans vote at much higher rates than the rest of the public. More people get Social Security than get tips, so this one would be more costly: $550 billion to $1.5 trillion, over 10 years. But it certainly seems like a worthwhile thing to do.
Of course, you could make the same ideological case (why tax money that comes from the government?) for unemployment payments, but that would be a lot harder to champion politically. Social Security is a much more neutral subject, obviously.
Overtime pay
This third idea, however, does not seem to have any strong ideological basis to it. Considering tips to be gifts and making Social Security tax-free both have a certain built-in logic, whereas making overtime pay tax-free just doesn't.
Workers already get a bonus for working overtime. Most earn 150 percent of their base pay ("time-and-a-half") for any overtime they put in. Why should it also be free of income taxes as well? It doesn't make a whole lot of sense, really.
Of course, people who regularly work overtime would likely disagree, I do realize that. But considered in a macroeconomic way, the result would tend to be the opposite of what politicians usually stand for. Think about it... if a business (or even a whole industry) had a whole bunch of workers who gladly put in extra hours on a regular basis, then what it would mean is that it would take fewer people to produce the same amount of work. If 100 workers all work 40-hour weeks, then the same exact amount of work could be achieved by hiring only 80 workers who all work 50-hour weeks. This would mean a net loss of 20 jobs. And what politician wants fewer people employed?
Plus, it would be an accounting nightmare. If any work you do above 40 hours a week isn't taxed at all, then it would make payroll a lot harder to figure, and it would likewise mean a headache at the end of the year, since your income would have to be reported in two chunks (taxable and nontaxable).
It would also cost more than the other two ideas -- $250 billion to $3 trillion dollars, over 10 years. And Congress is already going to have problems paying for all these tax changes (or adding them to the national debt), so this one seems the likeliest one for them to skip.
Conclusion
It is rather surprising that Republicans are even having these debates. These are all essentially populist ideas, which Republican politicians usually talk a lot about but never actually do. It wouldn't be hard to picture Bernie Sanders proposing these things, to put it another way.
Of course, these aren't the only Republican proposals on taxes, and the budget will contain more than just changing the tax code. So it's doubtful whether many Democrats will wind up supporting the whole package (which will assumably have plenty in it for Democrats to hate). But I have to say, two out of the three rather radical changes that Donald Trump has proposed for income taxes seem like ideas that any progressive could support. Again, on the campaign trail, Kamala Harris even expressed her support for some of these ideas, showing that this doesn't have to be a partisan issue.
Giving tipped workers and Social Security recipients a big break on their taxes both seem like good ideas. It'd mean less paperwork, less hassle, and a financial boost to people who could really use one. It'd probably be wildly popular with those directly affected. Making overtime pay tax-free, however, is a bridge too far for me personally -- especially since it is the most expensive of the three options.
-- Chris Weigant
Follow Chris on Twitter: @ChrisWeigant
I wonder what percentage of tipped workers actually owe any income tax. Not keeping track seems like the real upside to me, but if they really want to help those people, they should make it illegal to pay people $2 an hour. It's an outrage.
What is a tip, at heart? It is money given in appreciation for some service another person has provided.
Not to me. I give the tip unless the server does something egregious. I consider it a subsidy for people who should not have to work for $2 an hour.
It's money the employer should be paying. That's what a tip is.
Excellent post, and thanks for it. It got me thinking in ways I hadn't, about these proposals.
But for all the logic of your argument that tips are gifts not income, I tend to agree with John from Cens in [2] above.
No one is unaware that tipping is expected - almost compulsory - in the restaurant business. You HAVE to tip, or be yelled at (as I have witnessed, in NYC a number of years ago). Heck, in Europe the 'tip' is on your tab, already included as a 'service' surcharge on the cost of your meal.
For reasons of tradition and custom, as John from C. says, the customer is paying the server directly rather than through the employer/restauranteur. But it is most definitely 'income' from the server's point of view. It is the reason the server's wages are lower than standard - because the tip income is assumed to make the difference.
And so, yes, it's income, and it should be taxed.
Unless. Unless. Congress is willing to raise the minimum wage to a true living wage, even in metropolitan areas. And if, as well, Congress is willing to pass a law making a restaurant tip a completely optional charge that the customer is informed is entirely dependent on having received well-beyond-average superior service.
Not gonna happen. And until then, keep taxing tips - and make the restaurant owner responsible for tracking and recording the servers' tips for tax purposes. After all, the tips most often come as part of the credit card charge, which the owners have access to for informational purposes.
If a relative of yours sends you a check for $19,000 (or less), you won't have to pay any income taxes on it, for example.
If a relative (or not a relative) of yours sends you a check or gives you a large handful of Benjamins or transfers (who writes checks anymore?) cash to you for less or more than $19,000, it's still a gift that you don't have to pay income taxes on no matter how much it is. The $19,000 figure is how much a person may gift annually to another person (relative or not) without the necessity of the giver having to report it to the IRS on a Form 709 gift tax return. An individual may currently gift $13.99 million dollars in their lifetime without need of paying tax on those gifts; however, if Congress doesn't do something to keep that in place, it is going to sunset on December 31, 2025, wherein the annual gift tax exclusion for givers is going to drastically reduce.
By show of hands, who here believes Congress will allow the gift tax exclusion to shrink drastically? Rhetorical question. :)
They are nothing more than a series of gifts a person working certain jobs gets from the people they interact with. So why should they be taxed at all?
Why shouldn't an employee define themselves as a charity and have all "series of gifts" deemed tax deductible to the giver and receiver?
Thoughts to ponder. :)
There's also a strong ideological argument to be made for making Social Security payments tax-free as well.
Of course, it's not a new idea at all because Social Security payments were already tax-free until Ronald Reagan signed into law legislation in 1983 that drastically reduced the taxes of the very rich by shifting the tax burden onto the backs of middle class and retired taxpayers beginning in 1984.
middle class and retiredpoor and middle class After all, you receive this money from the government, so why should they want to claw some of it back at the end of the year? That doesn't make much sense.
Posted prematurely! How the heck did that happen!?
Last paragraph should read:
After all, you receive this money from the government, so why should they want to claw some of it back at the end of the year? That doesn't make much sense.
It makes sense when you consider why Social Security became taxable in 1984: In order to shift the tax burden away from wealthy taxpayers, somebody had to make up the difference. Whenever taxes are reduced from the rich, they are generally at the expense of the poor and middle class.
For instance, Donald Trump wants to replace income taxes altogether via tariffs that are a regressive tax on taxpayers... the largest tax hike on Americans in history.
Last paragraph should r
Apologies for my computer acting nuts; it seems to want to post BEFORE I've composed my comments!
FUN FACT: If the result of high tariffs in order erase income taxes altogether actually does produce a type of reverse offshoring effect causing manufacturing to return domestically, there will obviously be fewer imports in which to heavily tax and pass that on to consumers in the form of a Trump Tariff Tax.
In short: The "concepts of a plan" makes it a victim of its own success because nobody with two bumping brain cells had the ability to connect the dots before they devised a fake formula and began multiple tariff wars with nations globally including humans and non-humans who export nothing.
What is a tip, at heart?
At heart a tip is the employer shifting staffing costs from themselves to the customer.
Europeans don’t tip because people make decent money.
Obviously I didn’t read the above comments before I posted my immediate response to Chris’s question.
JL,
quite by accident I should add - I was just casually reading an article, and kinda went, hmm, I think maybe i've seen this before, and sure enough, there it is, presumably fed through some sort of paraphrasing software to avoid a word-for-word comparison. it's the same article though.
Thank you JL... The only "paraphrasing software" I use is my brain..
Glad to know you think I did such a swell job that I don't NEED to reference a link.. :D
That's very nice of you to say...
you're right, a post as long as the five in question really should have multiple citations (I think you well know they can easily be linked using the a=href"" code,
Yes, but the system won't let us post multiple links in a comment. So, what you are asking me to do NOW will increase my comment count 10-fold.. If ya'all are sure that is NOW what you want and CW gives the OK, then I am willing to do that...
Yunno, it would be MUCH easier to follow ya'all's rules if you quit changing them in an effort to get me banned..
Let's face reality, JL..
Basically, you want me to post short easy comments with references that will help YOU refute my comments..
That is NOT how political blogs work.. I make a comment and YA'ALL are supposed to do the research to refute my comment..
Basically, we're all a debate team of one and each of ya'all are to lazy to put the work in to WIN the debate and you want ME to alter my comments so YA'ALL can win the debate..
And Bash accuses ME of being lazy!!??? :eyeroll:
it's just basic consideration to let everyone know where it all came from.
Oh yea... Because ya'all have TOTALLY earned the right of me being courteous to ya'all, eh??
:MEGA eyeroll:
That was sarcasm... Just in case it was too subtle..
CW gave me one rule.. Don't Be A Jerk..
I am following that rule...
I am even ignoring the others who are NOT following that rule..
But Cad is STILL posting his sick and perverted sexual fantasies about my children and NONE of ya'all said a word..
Ya'all want courtesy???
Try sending some my way and THEN we can talk...
Crap!!! Reposted for clarity..
JL,
quite by accident I should add - I was just casually reading an article, and kinda went, hmm, I think maybe i've seen this before, and sure enough, there it is, presumably fed through some sort of paraphrasing software to avoid a word-for-word comparison. it's the same article though.
Thank you JL... The only "paraphrasing software" I use is my brain..
Glad to know you think I did such a swell job that I don't NEED to reference a link.. :D
That's very nice of you to say...
you're right, a post as long as the five in question really should have multiple citations (I think you well know they can easily be linked using the a=href"" code,
Yes, but the system won't let us post multiple links in a comment. So, what you are asking me to do NOW will increase my comment count 10-fold.. If ya'all are sure that is NOW what you want and CW gives the OK, then I am willing to do that...
Yunno, it would be MUCH easier to follow ya'all's rules if you quit changing them in an effort to get me banned..
Let's face reality, JL..
Basically, you want me to post short easy comments with references that will help YOU refute my comments..
That is NOT how political blogs work.. I make a comment and YA'ALL are supposed to do the research to refute my comment..
Basically, we're all a debate team of one and each of ya'all are to lazy to put the work in to WIN the debate and you want ME to alter my comments so YA'ALL can win the debate..
And Bash accuses ME of being lazy!!??? :eyeroll:
it's just basic consideration to let everyone know where it all came from.
Oh yea... Because ya'all have TOTALLY earned the right of me being courteous to ya'all, eh??
:MEGA eyeroll:
That was sarcasm... Just in case it was too subtle..
CW gave me one rule.. Don't Be A Jerk..
I am following that rule...
I am even ignoring the others who are NOT following that rule..
But Cad is STILL posting his sick and perverted sexual fantasies about my children and NONE of ya'all said a word..
Ya'all want courtesy???
Try sending some my way and THEN we can talk...
I never thought I would live to see the day when CW would put out a PRO PRESIDENT Trump '"atta boy, PRESIDENT TRUMP!!!" type commentary...
I am VERY pleased with this commentary and have absolutely NOTHING to add to it!! :D
A day off on my day off!!! Who would have thunked it!!!??? :D
Crap!!! Crapp!!!
Looks like I really DO need that day off!! :^/
Again, reposted for clarity...
I never thought I would live to see the day when CW would put out a PRO PRESIDENT Trump '"atta boy, PRESIDENT TRUMP!!!" type commentary...
I am VERY pleased with this commentary and have absolutely NOTHING to add to it!! :D
A day off on my day off!!! Who would have thunked it!!!??? :D
Chris,
Please get rid of the TDS chatbot troll. How much evidence do you need that it is just going to continue to play its troll games (that you've told it to stop) and offer NO UPSIDE WHATSOEVER?
@m,
the 1-link limit is only for raw URL's. there's no limit whatsoever on links using html anchors. I think you know this already and are using it as an excuse to be lazy.
given you've already lied about the articles you've copy-paraphrased, i'm less inclined to believe your claim that you're stealing it the old fashioned way rather than via technology. regardless, that question is ultimately immaterial to the fact that you're using a thesaurus to skirt the rules on posting outside articles. going paragraph by paragraph and posting the same content that someone else has posted, claiming it as your own without referencing the source, is still plagiarism, even if every single word is a little bit different. if it were a thirteen-year old doing so I might be more forgiving of the attempt, but you're a grown-ass man and should know better.
JL
But Cad is STILL posting his sick and perverted sexual fantasies about my children and NONE of ya'all said a word.
i've already said I don't approve of that stuff. i'm ignoring it and so should you.
JL,
the 1-link limit is only for raw URL's. there's no limit whatsoever on links using html anchors. I think you know this already and are using it as an excuse to be lazy.
Actually, I didn't.. It's been DECADES since I futzed around with HTML..
If you can provide me an example of what you are talking about, it would be most appreciated..
i've already said I don't approve of that stuff. i'm ignoring it and so should you.
Using that reasoning, ya'all should ignore my comments...
So, it seems that you should take your own advice, eh??
Irregardless of all that, it's really a moot point..
Once we have the site upgrade with the BLOCK feature, everything will be fine and we'll all live happily ever after...
super simple (i'm substituting brackets for carats):
{a href="URL-goes-here"}text of link{/a}
at least in CW's current site, you can do it as many times as you like.
Thank you... I'll incorporate that in my next comment..
here's the university of virginia's take on plagiarism
<a href="here's Harvard (at least until the storm troopers come to shut it down)
and here's the government's office of research integrity (until mELakON comes to shut IT down)
But Cad is STILL posting his sick and perverted sexual fantasies about my children and NONE of ya'all said a word.
He smells blood in the water and is trolling the troll. Not everyone is as forgiving as you would like and you have been particularly nasty to MtnCaddy even after he corrected some of your slurs. You reap what you sow...
whoops, left a bracket open
here's the university of virginia's take on plagiarism
here's Harvard
and here's the government's office of research integrity
So, when Cad "smells blood in the water: he's excused from sick and twisted and perverted comments involving my children and it's MY fault..
When I "smell blood in the water" and take advantage of that and totally destroy and decimate ya'all... It's STILL my fault..
Nice Democrat "logic", Bash...
:eyeroll:
I know everyone is not NEARLY forgiving as I am..
I was reminded of that when I pretty much funded Weigantia for a year and didn't even get a "thank you" much less any consideration..
So yea... NO ONE here is as forgiving as I am..
Would that ya could... :eyeroll:
You lied about him. Excessively. You have now reaped what sowed and playing the victim isn't likely to change that...
MtnCaddy is not trolling. He can't possibly be doing that. He doesn't fit the definition.
You lied about him. Excessively.
And Cad lied about me AND my children..
And CONTINUES to lie about me and my children..
Even after **YOU** told him he was lying...
But, Cad lying about me acceptable to you because his ideology is acceptable to you..
And I am a PRESIDENT Trump supporter so I deserve it..
And my children are the children of a PRESIDENT Trump supporter so THEY deserve it as well..
Nice set of values you woke progressives have. :eyeroll:
No wonder ya'all got your asses handed to ya'all in 2024....
Which brings up another salient point..
If PRESIDENT Trump and the GOP had gotten beat as bad as Headboard Harris and the woke progressive Democrats had, ya'all would LOVE to keep me around so ya'all could brutalize and torture me...
But that didn't happen. PRESIDENT Trump and the GOP totally and completely DESTROYED the woke progressive Democrats.. And to add MORE injury to ya'all's insult.... *I* called it dead on ballz accurate!!! :D
So, now ya'all are so filled with hate and intolerance and bigotry, your only recourse is to try and get me banned....
Like I said... Nice set of values ya'all got there.. :eyeroll:
So, now ya'all are so filled with hate and intolerance and bigotry, your only recourse is to try and get me banned....
Which makes NO SENSE, since ya'all are getting the BLOCK feature everyone has been begging for...
Which simply proves that ya'all don't just want to win.. Ya'all simply want to insure that I lose...
This is the woke progressive Democrat Party in 2025.. As nasty as they accuse PRESIDENT Trump of being..
"When fighting monsters one must insure not to become the monster.."
-Nietzsche
Ya'all have become the monster ya'all have been complaining about since Jun of 2015...
Michale
24
I know everyone is not NEARLY forgiving as I am..
I was reminded of that when I pretty much funded Weigantia for a year and didn't even get a "thank you" much less any consideration..
Aren't you still posting despite your multiple archived rule violations that make Don Harris look like a Boy Scout? You're not a victim here so you can seriously stop the stale routine. So how many violations wherein you troll, spam, plagiarize, hurl repetitive slurs and requests that commenters commit suicide as archived herein for decades (and still occurring) do you feel you are entitled for what you have donated or for your state of perpetual grievance playing victim?
You're kicking no one's ass except your own.
So yea... NO ONE here is as forgiving as I am..
*laughs*
Would that ya could... :eyeroll:
You're not a victim here.
John From Censornati
26
Exactly. :)
And Cad lied about me AND my children..
And CONTINUES to lie about me and my children..
And maybe in a year or two he will catch up to the volume of your slur string about him. You were a dick, he doesn't like you and is fishing for a red card. I'm neither bothered by you nor his actions. The political garbage is just a pathetic attempt at playing the victim...
that is definitely not ignoring it.
m: I was reminded of that when I pretty much funded Weigantia for a year and didn't even get a "thank you" much less any consideration.
k: Aren't you still posting despite your multiple archived rule violations?
wait, it's better with doors slamming
Michale
27
And Cad lied about me AND my children..
You're not a victim here.
And CONTINUES to lie about me and my children..
You're not a victim here.
Even after **YOU** told him he was lying...
You're not a victim now, and you weren't a victim then.
But, Cad lying about me acceptable to you because his ideology is acceptable to you..
Putting words in someone's mouth that they never said.
And I am a PRESIDENT Trump supporter so I deserve it..
If that's the way you feel, then you're definitely not a victim here. Otherwise, you're just inventing fake feelings and ascribing them to someone else in order to play victim.
And my children are the children of a PRESIDENT Trump supporter so THEY deserve it as well..
Fake feelings.
Nice set of values you woke progressives have. :eyeroll:
Fake victim.
No wonder ya'all got your asses handed to ya'all in 2024....
Standard operational trolling.
Which brings up another salient point..
Sentence fragment.
If PRESIDENT Trump and the GOP had gotten beat as bad as Headboard Harris and the woke progressive Democrats had, ya'all would LOVE to keep me around so ya'all could brutalize and torture me...
Troll projection.
But that didn't happen. PRESIDENT Trump and the GOP totally and completely DESTROYED the woke progressive Democrats.. And to add MORE injury to ya'all's insult.... *I* called it dead on ballz accurate!!! :D
We know PRESIDENT Trump is president. We know you get your jollies trolling the group with that repetitive boldified bullshit.
So, now ya'all are so filled with hate and intolerance and bigotry, your only recourse is to try and get me banned....
You're not a victim here. Anything else?
Like I said... Nice set of values ya'all got there.. :eyeroll:
You reap what you sow. You're definitely not a victim here or on any other website where you've pissed all over the commenters for shits and giggles.
@b
You were a dick, he doesn't like you and is fishing for a red card.
I think the internet term trolling originated from the fishing definition, before it migrated to the creatures that live under bridges.
@jfc,
even in the same context, the verb and the noun have different definitions. trolling from time to time doesn't necessarily make one a troll.
JL
no other implications in that quote by the way, I just love the film in general and that scene in particular.
nypoet22
32
:eyeroll:
:eyeroll:
:eyeroll:
:eyeroll:
:eyeroll:
Just kidding! *big hug*
Duh.
When Churchill Downs cancelled their $1 BILLION project due to the Trump Taxes, they did it in advance of the KY Derby so that the media will talk about it. It seems Bezos doesn't have their spine.
Louisville takes another huge orange economic hit
Thanks Trump
John From Censornati
39
When Churchill Downs cancelled their $1 BILLION project due to the Trump Taxes, they did it in advance of the KY Derby so that the media will talk about it. It seems Bezos doesn't have their spine.
Poor Jeff. Everything about him screams: Overcompensating! :)
NYPoet22-
Yes, it was originally “trawling”, not that that term lasted long…
Blood in the water, indeed.
I never understood why anyone has given this troll a moment’s attention. Musta been a helluva poster back before I got down here, but I missed all that and have to work with what I’ve seen and it’s obvious that he offers NOTHING, period. Full stop.
Red card him now or dick around and red card him later. Why wait?
MtnCaddy
43
He has definitely been a dick "at levels that nobody has ever seen before."
Facts to support? Archived for decades. I got links if you'd like to see something specific.
. . . like bacon!
You take a look at bacon and some of these products, and some people don't eat bacon anymore. We are going to get the energy prices down. When we get energy down, you know, this was caused by their horrible energy — wind, they want wind all over the place. But when it doesn't blow we have a little problem. This was caused by energy. This was really caused by energy, and also their unbelievable spending. They are spending us out of wealth, actually, they're taking our wealth away, but it was caused by energy.
mmmm, bacon.....