Trump Plan to Exempt Tips From Taxes Could Cost $250 Billion
- Cost may be higher as employer behavior shifts, watchdog warns
- Trump seeks to court young, service workers by exempting tips
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Donald Trump’s new proposal to exempt tips from taxation would add between $150 billion to $250 billion to the federal budget deficit over 10 years, a budget watchdog group forecast on Monday.
The cost estimate from the nonpartisan Committee for a Responsible Federal Budget suggests that the plan’s deficit impact would be comparable and potentially much larger than the $172 billion projected revenue loss from extending the 2017 tax cuts for small businesses and other so-called pass-through companies due to expire next year.