Senate Republicans Considering Higher Taxes on Rich to Pay for ‘No Tax on Tips’ 👉 Updatem News

The proposal is one among many being considered by the Republican conference, motivated by the strict rules of the budget reconciliation process.

WASHINGTON—Members of the Senate Republican Conference have told The Epoch Times that they are considering a proposal to increase taxes on wealthy individuals to deliver on one of President Donald Trump’s popular campaign promises: “No tax on tips.”

During his 2024 presidential campaign, Trump repeated the phrase multiple times to win the support of service industry workers, particularly in battleground states such as Nevada, whose income, apart from their regular salary, often includes tips from customers.

Following his inauguration, Trump has reiterated his commitment to the proposal, which may cost the Treasury between $100 billion and $200 billion over 10 years, according to the Bipartisan Policy Center.

Any tax changes desired by the Trump administration must be approved by Congress through legislation and considered in the ongoing “budget reconciliation” process, which is subject to restrictive rules.

One of them is the Byrd Rule, which, among other things, prevents any measure that would increase the federal budget deficit after 10 years.

If “no tax on tips” is to be permanently enacted, Republicans must find a way to raise revenue that offsets the cost—one such proposal currently being considered is to let tax cuts for wealthy earners (part of the Tax Cuts and Jobs Act, or TCJA, of 2017) expire.

“We’ve talked about a lot of different scenarios. That is one possibility,” Sen. Mike Rounds (R-S.D.) told The Epoch Times on April 3.

“That has been floated. There’s a ton of things; cutting the rate has also been floated,” said Sen. James Lankford (R-Okla), shortly thereafter.

Were Republicans to let income tax rates on high earners expire, it is unclear whether that would be enough to offset the whole cost of the ‘no tax on tips’ proposal.

The party is considering many other fiscal measures, such as making all rate reductions of the TCJA permanent, and there are likely to be many more revenue offsets, such as changes to Medicaid.

However, raising taxes on wealthy earners would be unorthodox for the Republican Party, which has often campaigned on universal tax cuts.

During the election, Trump told an audience at his Mar-a-Lago Club in Palm Beach, Florida, “You’re rich as hell, and we’re going to give you tax cuts.”

As a result, some Republicans have expressed flat opposition to the idea.

“I’m not voting for a tax increase,” said Sen. Rick Scott (R-Fla.) told The Epoch Times.

“We have plenty of revenue in this country,” he added, suggesting that the “no tax on tips” proposal could be offset in another way.

The chairman of the Senate Budget Committee, Sen. Lindsey Graham (R-S.C.), could not be reached for comment.

Original News Source Link – Epoch Times

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