GOP Lawmakers File Legislation to Exempt Tips From Federal Taxes.

 ‘Taxing tips is regressive and goes against American tradition,’ Reps. Thomas Massie and Matt Gaetz said in a joint statement.

A waiter works at a restaurant in Alexandria, Va., on June 3, 2022. (Olivier Douliery/AFP via Getty Images)

Reps. Thomas Massie (R-Ky.) and Matt Gaetz (R-Fla.) introduced a bill on June 18 that aims to amend the Internal Revenue Code of 1986 to make tips exempt from income and employment taxes.

This legislative proposal, titled the “Tax Free Tips Act of 2024,” is designed to alleviate the tax burden on individuals who rely on gratuities as a significant portion of their income.

“As the cost of living continues to rise, the hardworking men and women in the service industry, many of whom may be working a second job to make ends meet, must be allowed to keep every dollar of tip money they earn,” Mr. Gaetz said in a statement after filing the legislation.

Mr. Massie indicated the lawmakers were taking direction from fellow conservatives former Rep. Ron Paul and former President Donald Trump, as they both “have it right” on the issue.

Former President Trump said at a campaign rally earlier this month that one of his first acts should he win re-election would be to cut the tax on tips, while Mr. Paul has advocated for the measure for decades.

“Taxing tips is regressive and goes against American tradition,” Mr. Massie said in the statement. “But now digital payments allow the government to tax every transaction, even those that historically have not been taxed. With inflation raging, it only makes sense to eliminate the tax on tips and provide relief to working folks.”