At a rally in Las Vegas, former President Donald Trump promised to eliminate taxation on tips for service workers if re-elected, appealing to voters in Nevada, a state heavily reliant on the hospitality industry. Trump emphasized that this change would be a priority, addressing what he described as a long-standing issue for service workers who often depend on tips as a significant portion of their income.

This announcement marks the first time Trump has proposed this policy. Currently, the IRS mandates that service workers report their tip earnings, which are then taxed as regular income. This policy is particularly impactful for those earning below minimum wage, making tips essential for their financial stability.

For Trump’s proposal to become law, it would require Congressional approval. While Congress has not previously addressed this issue, there will be an opportunity in 2025 to revise tax laws when Trump’s 2017 tax legislation expires. Tips were not considered in the original 2017 tax reforms.

Trump’s proposal aims to gain support from Nevada’s service workers, who have faced economic challenges since the COVID-19 pandemic affected the tourism sector.

However, the influential Las Vegas Culinary Workers Union, representing over 60,000 workers and already endorsing President Biden, dismissed Trump’s promise as a mere campaign tactic. The union’s secretary-treasurer stressed that workers seek genuine solutions rather than campaign rhetoric from Trump, whom they referred to as a convicted felon.

This rally was Trump’s third event in Las Vegas this year as he campaigns to win Nevada, a critical swing state that has not supported a Republican presidential candidate since 2004. Notably, Trump avoided discussing his recent conviction on 34 felony counts related to falsifying business records, focusing instead on his campaign promises.