Nina Mast on the hidden flaws in the 'No Tax on Tips' policy

Nina Mast, Economic Analyst at the Economic Policy Institute, joined the America's Work Force Union Podcast to discuss the shortcomings of the "No Tax on Tips" policy. She explained why this policy fails to benefit most workers, how it compares to raising the minimum wage and the broader implications for tax policy and worker welfare.

Mast said the "No Tax on Tips" policy primarily benefits high-earning tipped workers and employers, not most tipped employees. She noted that the wages earned by many tipped workers are too little to pay income tax, rendering the policy ineffective for those who need it most. Instead, Mast advocated for raising the minimum wage and eliminating the tipped sub-minimum wage, which would benefit nearly 23 million workers, including 3 million tipped workers, with no expiration date.

Mast continued by highlighting the proposed policy's temporary nature, which is set to expire after four years. This short-term approach contrasts sharply with more sustainable solutions like increasing the minimum wage. Mast said the policy shifts the burden onto taxpayers while allowing employers to avoid raising base wages, perpetuating a system rife with exploitation and discrimination in tipped industries.

Finally, Mast provided more context on the "No Tax on Tips" policy within broader tax proposals. She said it aligns with a pattern of shifting tax burdens onto low-income individuals while providing substantial cuts for the wealthy. Mast warned that such policies often come at the expense of crucial public programs and services, potentially leading to millions losing health insurance and food stamp benefits.

For more from Mast, listen to the full episode of the America's Work Force Union Podcast above.