Tax cut on tips

Tillis wants major changes to Trump’s tax cut on tips

The senator is pushing for a different approach that would treat people with similar earnings more equally.

Brian Faler

Sen. Thom Tillis indicated Tuesday that he wants significant changes to Republicans’ plans to cut taxes on tips, one of President Donald Trump’s top priorities in the megabill now before lawmakers.

The House-approved draft of the tip proposal is unfair to people who work in industries where tipping isn’t customary, the North Carolina Republican told POLITICO. He complained that a waiter would qualify for the break but a warehouse worker would not, even if they had similar incomes.

Tillis, a tax writer, said he wants a different approach that would treat people with similar earnings more equally.

He also raised the possibility of dropping the $40 billion tip proposal from the legislation altogether, noting the idea has bipartisan support and expressing doubt that Democrats would stop Republicans from passing it separately later.

“Maybe there’s a different way to achieve what they’re setting out to do,” he said.

Tillis’ comments come as Senate Republican leaders say they intend to make changes to the sprawling tax, energy and immigration package approved last month by the House and still get it to Trump’s desk by their July 4 recess. That could be difficult if individual senators, who have lots of leverage given Republicans’ thin majority in the chamber, demand major changes.

Trump campaigned on making tips tax-free, and the House draft would create a new tip deduction for people in industries where tipping is customary so long as they don’t make more than $160,000.

One alternative, Tillis said, would be to create “some other benefit” available to a wider swathe of workers but, to keep the budgetary cost down, limit it to people with lower incomes.

Tillis also said he doubted Democrats would oppose the plan if Republicans tried to move it separately later, noting the chamber late last month unanimously approved a different bill by Sen. Ted Cruz (R-Texas) to nix taxes on tips.

“I’m at a loss for what Democrats would vote against it,” said Tillis. “They’ve already evidenced that they’re worried about voting ‘no’.”