LETTER: Trump touts no taxes on tips

LETTER: Trump touts no taxes on tips Arthur Timm submitted a letter to the Review-Journal under the heading “Tax bill.” In it he asserts that tips and overtime wages may be exempt from federal income tax for certain qualifying workers, though he does not specify who meets that definition. According to the law, eligibility generally applies to employees in occupations that customarily and regularly receive tips before December 31, 2024, who possess a valid Social Security number for employment and satisfy any additional criteria set forth by statute. Timm also notes that those workers remain liable for Social Security and Medicare payroll taxes amounting to 7.65 percent of the same earnings. He acknowledges this point but argues it misses the purpose of the provision, which aims to reduce federal income tax liabilities, not payroll obligations. He emphasizes that the two taxes serve distinct functions and that the measure was never intended to eliminate payroll taxes. He further writes, “Accordingly, those workers that marque truthful small arsenic to not wage income taxes won’t get immoderate taxation break.” The response observes that this remark reflects basic arithmetic: when a taxpayer owes no federal income tax, there is no liability to reduce, just as with any deduction or credit. This characteristic is not a defect in the law but a reflection of how the income‑tax system operates.