Members of the Virginia General Assembly are balancing the books for next fiscal year, and that includes a discussion about tax cuts.
No tax on tips. It was a major issue on the presidential campaign trail, and now members of the Virginia General Assembly are debating an effort to give tax breaks on tipped income. The bill was introduced by Senator Emily Jordan, a Republican from the Isle of Wight.
"I was wait staff on a riverboat. It was a lot of fun, actually. But it's long days going up and down tons of stairs serving people, and it's hard work," Jordan says. "When you work in the service industry, tips are a large part of your income."
Critics of no tax on tips say it's great to give tax cuts to low-wage workers, but there are better ways of doing it.
"Look at another occupation that's non-tipped but also a low-wage job such as child care workers, which make about $32,000 a year but would not see a benefit from this bill," says Rodrigo Soto at the Commonwealth Institute. "So, it picks winners and losers at a time when we could be lifting up all Virginians through proposals like the earned-income tax credit or improving the minimum wage in Virginia."
Earlier this week, the Senate Finance Committee rejected no tax on tips. Meanwhile, raising the minimum wage is a top priority for Democrats who run the House and Senate.
