I am, of course, a Trump supporter, and so theoretically I support most of what he advocates, and most of what he proposes as solutions to the problems we all agree are the pressing issues of the day.
And I do, even though this column is about my disagreement with the priority of some of the solutions being proposed.
So let us not rush to condemn me for what I am to say, or worse, misinterpret.
I don't see the "No Tax on Tips" campaign promise as being a hill to die on, if it comes to hills and the dying thereupon.
President Trump posited three significant reliefs from taxation when he was Candidate Trump, and we all remember them:
- Removing the Federal tax on tip income
- Removing the Federal tax on Social Security retirement benefits
- Removing the tax on overtime wages
Now, I need you to think of the first and third bullets as different from the second. Whatever one thinks of tips from the perspective of the waiter or caddie or nail technician, the fact remains that their tips are indeed earned income. That is enshrined in the law in the sense that tipped employees are not obligated to be paid minimum wage, the idea being that their primary income is, in fact, their tips.
Whatever argument there may be for not taxing tips, even that argument doesn't apply to taxing overtime. Overtime labor is labor; it is earned income, and while perhaps there could be a stretchy defense for not taxing the uplift -- i.e., taxing only the "time" part of "time-and-a-half" -- it is earned, and should be subject to taxation.
[I'll remind you -- and myself -- that there really are required functions of government, and therefore the country does indeed need to raise money through taxation to pay for them. As long as there is an income tax, the points above are valid.]
When it comes to Social Security retirement, however, the above has no bearing. Although we understand that Social Security is not really the government taking 7% of our income and eventually giving it back to us if we live long enough to retire, conceptually it is quite similar and OK to think of it that way for our purposes.
That money was earned by workers. It was taken as a tax on earned income at the time of employment and used by the government for whatever it felt like. It is not invested; not put into an interest-bearing instrument, as we would do ourselves. Nothing was done to use the money seized from us to dedicate it to our retirement individually, let alone for it to grow.
It is already treated differently from tips and overtime, in that federal tax on Social Security retirement benefits is not done on 100% of the benefit; it is taxed at a percentage of the total amount depending on your other income -- which in itself is inappropriate, given that we're simply given back money taken from us years back and poorly invested on our behalf.
I'm not actually arguing against ceasing taxation on tips or overtime. I'm simply pointing out priorities based on the nature of the earning.
And I strongly advise President Trump, the politics notwithstanding (and understood), to prioritize removing the tax on Social Security retirement first, with the other two pledges kept on an "if possible" basis.
Arguments welcome.
Copyright 2025 by Robert Sutton. Like what you read here? There are over 1,000 posts from Bob at www.uberthoughtsUSA.com and, after four years of writing a new one daily, he still posts thoughts once in a while as "visiting columns", no longer the "prolific essayist" he was through 2018, but still around. Appearance, advertising, sponsorship and interview inquiries cheerfully welcomed at bsutton@alum.mit.edu or on Twitter at @rmosutton.