Republicans in Michigan are taking a page out of former President Donald Trump’s book, proposing a “no tax on tips” policy.
Republican state Rep. Jim Aragona said tips would no longer be considered taxable income in Michigan under the bill, which he introduced last month. While the tips would still be subject to federal income tax, both Trump and Vice President Kamala Harris have made promises to end federal taxation of tips if they win in November.
“This is Trump’s idea that Vice President Harris stole, so now I’m stealing it for Michigan,” Aragona told Michigan Live.
“If the Democrats were smart, they’d pass it to show that this isn’t just a campaign gimmick by Harris, but I’m betting they won’t do that because they know that if the vice president really wanted to get rid of taxes on tips, she could go to Congress and make it happen right now instead of just making promises,” Aragona argued.
Fifteen other Republican state representatives co-sponsored Aragona’s bill. It has not been brought to the floor as it remains in the Tax Policy Committee in the Michigan House of Representatives.
In June, Trump announced his promise to end taxing tipped wages at a Las Vegas rally in a move to court workers in the service industry. Two months later, Harris announced her own promise to end taxes on tipped wages, which drew the ire of Trump.
“This was a TRUMP idea – She has no ideas, she can only steal from me,” Trump posted on Truth Social at the time. “Remember, Kamala has proposed the LARGEST TAX INCREASE IN HISTORY – It won’t happen. MAKE AMERICA GREAT AGAIN!!!”
Aragona’s bill would define tipped employees as those working in occupations where they regularly receive more than $30 a month in tips. If the bill were to become law, workers who qualify would then deduct documented tips from their adjusted gross income on their state income tax forms.
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He said some effects of removing taxes on tips would be better service and more people wanting to work in the service industry.
“Quality waitstaff hustle for their money,” Aragona said. “Getting rid of taxes on tips will give them an incentive to work more and provide better customer service. It will help with staffing issues because more people will want to work in restaurants, and customers will get better service.”