Gov. Tony Evers wants to eliminate income tax on cash tips to help those in the service industry. He made the announcement during his state budget address last week. PC: Fox 11 Online
GREEN BAY, WI (WTAQ-WLUK) — Gov. Tony Evers wants to eliminate income tax on cash tips to help those in the service industry. He made the announcement during his state budget address last week.
It’s part of his plan to try to lower costs for working families.
“I want us to work together to pass my proposal to support students and workers and our service industries by letting them keep the tips they earn tax-free,” Evers said. “Let’s eliminate taxes on cash tips.”
Eliminating taxes on tips isn’t an idea just the governor is entertaining. President Donald Trump touted it throughout his campaign.
“We’re going to dramatically cut taxes for families and for workers and for companies, including no tax on tips,” Trump said.
No tax on cash tips would mean more money in the pockets of servers. Restaurants in Northeast Wisconsin such as Kroll’s West say it’s about time.
“I think it should have happened years and years and years ago. This has been an eyesore for a long time,” owner Mike Wier said.
Wier said the restaurant industry is the only one that claims tips, which isn’t fair, especially since the federal minimum wage for servers is around $5 per hour. Wier believes the untaxed tips will help his workers make ends meet.
“Any time anybody hears they don’t have to pay a tax on something, they see a smile. Then added to that smile is maybe they can pick up that extra item that they need or their child needs,” Wier said.
If Evers’ proposal goes through, hourly pay won’t be impacted at Kroll’s West. However, Wier said it will make running a business simpler, with less records to keep and less to report.
While Kroll’s West is excited for the proposal, Copper State Brewing is staying cautiously optimistic, but they hope it will benefit the servers in the long run.
“I think if you work in this business, I don’t feel like anybody would be opposed to it,” bar manager Michael Callsen said. “I also kind of wonder how that would all be structured though, I’d have to see how the bill is structured.”
Callsen wonders whether or not the proposal would impact wages or even customers’ tipping habits. He said if tips are no longer taxed, it would give an extra boost for those struggling and would like to see it passed sooner rather than later.
“I hope it happens before I retire, that’s all,” he said.
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