March 4, 2025 | Dems Want Taxes on Tips and Overtime

The party of war voted in unison against ending taxes on tips and overtime work. Only one Republican voted against these measures, with 217 in favor. The Democrats are NOT the party of the working class and have been actively working to undermine the people for years.

Ending taxes on tips and overtime was one of Trump’s campaign promises, which is precisely why the Democrats struck down the bill. Laughably, the opponents stated they were concerned that losing $2 trillion in tax breaks over the next decade would hurt the national debt. The very people who have never seen a social program they did not want to fund are suddenly concerned about the national debt.

Kamala Harris was in favor of these policies and had the backing of her party. Her feigned support was an effort to win over the people, no different from the failed promise of ending student loans. “It is my promise to everyone here, when I am president, we will continue to fight for working families, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers,” Harris told a crowd at the University of Nevada in August 2024.

The Democrats want everyone to be equally poor and dependent upon the government. Some lawmakers say eliminating tip taxes would be unfair to workers in states with a lower minimum wage. Under that line of thinking, should we penalize those who work in cities where, say, a meal is 5X the price as it would be elsewhere? Why should anyone out earn another in this fantasy socialist utopia? Minimum wage is a short-sighted political move that ignores the fundamental laws of supply and demand. Politicians always assume they can simply legislate prosperity, but history proves otherwise. Forcing businesses to pay higher wages does not magically create wealth—it destroys jobs, accelerates automation, and puts small businesses out of business.

Wages rise naturally in a real economic expansion when businesses compete for workers. That is how a free market functions. But when governments artificially raise wages, businesses respond logically—by cutting jobs, reducing hours, or passing the costs onto consumers through inflation. The very people politicians claim to be helping end up worse off, as their cost of living rises and entry-level jobs disappear.

Tipping culture is completely out of control in America. There is an expectation for consumers to pay a minimum of 20% in addition to inflated services, regardless of the quality of their service. Kiosks and self-checkout payment systems often ask for a tip. Consumers are less likely to go out when money is tight and the initial service has already risen due to inflation. Then, the government wants to take a portion of these tips AND the initial salary in most states. Whatever we must buy is then taxed; whatever we save is then taxed. Government greed knows no bounds. They’re too incompetent to manage funds, so they continue to squeeze our pockets, but it is never enough.

Taxing overtime pay is just another example of how clueless politicians are when it comes to economics. The entire purpose of overtime is to compensate workers for putting in extra hours beyond a normal workweek. Yet, instead of rewarding hard work, governments see it as another opportunity to grab more revenue. Why would the government disincentivize people from working? We are eager to keep our hospitals staffed, ports flowing, trucks moving, etc. but are discouraging a productive workforce by dipping into their earnings.

Do the Dems who voted against these policies hate the American people, Trump, or both? No one is buying their feigned concern for the national debt. If policymakers had any real understanding of economics, they would eliminate taxes on overtime and tips entirely. If you want a strong economy, you incentivize productivity, not penalize it.

Martin Armstrong March 4th, 2025

Posted In: Armstrong Economics

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