Forget ‘no tax on tips’—increasing the minimum wage would deliver dramatically larger raises for millions more workers without letting employers off the hook
At President Trump’s direction, Congress is considering proposals to exempt tips from taxable income. After Trump floated this gimmick on the campaign trail, Republican and Democratic elected officials alike have embraced the idea. The House Republican budget bill (H.R. 1) includes a “no tax on tips” provision that gives the illusion of helping lower-income workers—while the rest of the legislation hands huge giveaways to the rich at the expense of the working class. The Senate recently passed a standalone version of no tax on tips that similarly provides the false impression of aiding workers while giving employers excuses to incentivize tipped work and keep base wages low.[...]
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22 sats \ 4 replies \ @Undisciplined 23h
They must not be considering all the people who lose their jobs as "affected workers", because it's routinely been found to be a net harm to low income workers (and a regressive one at that), which is exactly what theory predicts too.
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21 sats \ 3 replies \ @0xbitcoiner OP 23h
I don’t know if they counted it or not, but if they lost their jobs, doesn’t it make sense that it should be not counted? This is a political issue, and I get that raising the minimum wage could actually push more people into unemployment, since a lot of companies just can’t afford to pay. Same thing’s being debated here in Europe.
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31 sats \ 2 replies \ @Undisciplined 23h
Losing your job because of a policy sure seems like being affected by it. Also, the primary mechanism isn't people actually getting fired, but rather employers being more reluctant to hire. So, the "affected" population also includes all those people who would have otherwise had jobs.
If they exclude it, then it's a preposterously biased estimate. It then means "Of those who benefit from this policy, here's how much they benefit." not "This is the net benefit of this policy." Only the latter is a relevant standard for doing a policy comparison.
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21 sats \ 1 reply \ @0xbitcoiner OP 23h
Ah, I totally missed that! Thanks for clearing it up.
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26 sats \ 0 replies \ @Undisciplined 23h
That's understandable, since I didn't mention it.
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22 sats \ 1 reply \ @grayruby 22h
These studies always wildly underestimate the negative effects of raising minimum wages significantly.
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40 sats \ 0 replies \ @0xbitcoiner OP 22h
EPI really doesn’t like Trump, maybe not any of the right-wing, to be honest!
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0 sats \ 0 replies \ @021f3af1a6 21h
Interesting argument. I’m from Malawi where the minimum wage debates are different but still politically charged. I wonder, how do policies like “no tax on tips” affect countries with a big informal economy? Does anyone here have insight on that?
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0 sats \ 0 replies \ @note_bene 21h
Partisanship and PR masquerading as "economics".
Why not Double Raise the Wage Act? By doubling the proposed raise in the RaiseTheWageAct, workers get $1,400B instead of the paltry projected $700B in the original bill.
[Insert Bar Chart showing 14 > 7]
Of course when answering why we don't just Double Do (or even Triple(!) Do) a Good Thing we now have to answer that there are tradeoffs. And there's very obscure and uncertain calculations trying to figure this out for 200 million different people.
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