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Rosen, Cortez Masto join Cruz's bill to end federal taxes on tips

The Nevada senators are the first Democrats to join the bill — a policy first proposed by Trump.
Gabby Birenbaum
Gabby Birenbaum
CongressElection 2024Government
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Nevada’s two Democratic senators rarely agree with Sen. Ted Cruz (R-TX) — let alone former Republican President Donald Trump.

But Sens. Catherine Cortez Masto (D-NV) and Jacky Rosen (D-NV) signed onto a bill Thursday that Cruz proposed to end federal taxation on tips, becoming the first Democrats to co-sponsor the policy in either chamber. It’s a move approved by the influential Culinary Workers Union Local 226, a longtime ally of the senators.

Trump proposed exempting tips from taxation for wage earners at a June rally in Las Vegas, saying he got the idea from a cocktail waitress. It was an apt location for the pitch — known for its hospitality industry, Nevada has the highest concentration of tipped wage earners among all states. 

In statements, both senators said eliminating taxes on tips was just one of many solutions — including raising the federal minimum wage and better enforcing the tax code against corporations and the ultra-wealthy — they support for helping tipped workers and achieving tax fairness. But by joining Cruz’s bill, the senators are acknowledging the importance of the issue in Nevada and indicating their willingness to support a Republican-led effort.

“Nevada has a higher percentage of tipped workers than any other state, and getting rid of the federal income tax on tips would deliver immediate financial relief for service and hospitality staff across our state who are working harder than ever while getting squeezed by rising costs,” Rosen said.

[For more on the potential impacts and politics of Trump’s proposal, click here.]

Trump’s proposal has created strange political bedfellows. Although many Republicans, including Cruz and Nevada GOP Senate candidate Sam Brown, embraced the idea, others worried about how the loss of revenue might negatively impact the deficit. Many Democrats, including Rep. Susie Lee (D-NV), expressed openness to the idea but said they mistrusted Trump to execute it. Rosen’s campaign dinged Brown, who claimed the proposal was his idea as well, for promoting “empty talking points” after Trump first floated the policy, while maintaining her support for tax relief for tipped workers.

The Culinary Union, the powerful Democratic-aligned hospitality workers union in Las Vegas, said that though tip earners need relief and the group is supportive of Cruz’s bill, the idea was little more than a campaign Hail Mary from Trump.

However, with support from the senators, Culinary Union secretary-treasurer Ted Pappageorge said in a statement that the union was pleased with the proposal.

"Culinary Union applauds Sen. Rosen, a former Culinary Union member and tipped worker, and Sen. Cortez Masto for joining bipartisan legislation to provide relief to hospitality workers in Nevada,” Pappageorge said. “Real solutions are what workers rely on and we are proud to have senators who are fighting to deliver real results for working families.”

Cruz’s bill has attracted four Republican co-sponsors in addition to the Nevada Democrats, including National Republican Senatorial Committee chair Steve Daines (R-MT), who said he believes the proposal will help Republicans make inroads with workers.

This story was updated at 3 p.m. on 7/12/24 to include the Rosen campaign's initial reaction to Trump's proposal.

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