Bacon, Taxes, and Tips

Explaining Complexity

In my previous post, I encouraged readers to show up to Congressman Bacon’s Town Hall meeting and ask him about taxes. But a Bacon supporter thought I was being unfair.

Here is the reality. Tips have always spun some level of controversy because many do not understand what a tip is paying for. You tip because someone is waiting on your needs and wants, hence they are called a waiter or other. This worker is not like an assembly worker putting items in a box, but instead is there to address your needs and wants. If there is not a demand for their service, they are relieved of work for the day.

In the hospitality industry, tipping is customary and people should understand why. If you make a mess of a hotel room, tip housekeeping so no one finds about all your toe nail clippings in the bathroom. (I could really go “down under” on this but I don’t want to gross you out too much.)

Experienced hospitality workers are quick to figure out what you need, are able to answer questions, and tell you of the best offers. They know what brings them tips: answers backed by experience, and a skill for fast, prompt service. Many make substantial money off of tips even when they work a limited number of hours.

But the Federal government smells money. Taxing tips at the Federal level came into force in 1982 (https://en.wikipedia.org/wiki/Tax_Equity_and_Fiscal_Responsibility_Act_of_1982). Ever since, there has been ploys to do something about this pesky tax law. Congressman Ron Paul first advocated to abolish the tax as early as 2007 (https://www.usnews.com/news/national-news/articles/2024-08-12/what-to-know-about-the-harris-trump-proposals-to-cut-taxes-on-tips).

As many know, both Presidential candidates Trump and Harris have embraced the idea abolish taxes on tips, in large part because Nevada is a battle state in the presidential election. Las Vegas is dominated by the hospitality industry. Now some members of Congress want to act.

Congress has various versions to eliminate the tax on tips. Congressman Thomas Massie has a proposal which actually has co-sponsors (https://www.congress.gov/bill/118th-congress/house-bill/8785/cosponsors) but not Bacon When I mentioned this to supporters of Congressman Bacon, they retored he had introduced the idea some time ago (https://www.congress.gov/bill/118th-congress/house-bill/7870/cosponsors) but Bacon’s proposal did not gain any co-sponsers.

US Senator Ted Cruz has put forth legislation which is supported by Nebraska US Senator Pete Ricketts (https://www.congress.gov/bill/118th-congress/senate-bill/4621/cosponsors). Congressman Bryon Donalds introduced the companion bill in the House (https://www.congress.gov/bill/118th-congress/house-bill/8941/cosponsors) which has co-sponsors but not Bacon. What is his thoughts on this matter?

Perhaps Bacon merely wanted to avoid the conflict between dueling proposals. But perhaps he could get Massie and Donalds to support each others efforts and join them. Perhaps he decided the proposal has little chance of passing. Who knows?