Presidential Candidate Platforms Explained: No Tax on Tips

Presidential candidates Donald Trump and Kamala Harris have both proposed eliminating taxes on tips. While the idea may appeal to many voters, economists warn that exempting tips from taxation could cost the government up to $250 billion in lost revenue over a decade and lead to potential abuse of the system. Also, implementation challenges, including IRS enforcement and shifts in tipping behavior, could undermine the benefits of such tax exemptions.

Since January, 22 US states and over 36 cities and counties have raised their minimum wage, impacting 9.9 million workers, primarily women and minorities. Proponents of raising the minimum wage say it leads to higher earnings, reduces poverty, and increases employment stability. Critics contend it results in job losses, hurts small businesses, and increases prices for consumers.

In his classic 1962 book Capitalism and Freedom, Nobel Prize-winning economist Milton Friedman argues that a society cannot maintain political freedom without a robust commitment to free-market capitalism—and that for capitalism to function best, it must be free of government interference. It is hard to overstate the extent to which Friedman’s once-controversial ideas have triumphed. Over the past 40 years, governments across the world have moved to market-based solutions by reducing marginal tax rates, eliminating tariffs, privatizing public monopolies, and introducing choice in public education. Some might disagree about the effects of Friedman’s ideas—but no one can deny their influence.

Presidential candidates Donald Trump and Kamala Harris have both proposed eliminating taxes on tips. While the idea may appeal to many voters, economists warn that exempting tips from taxation could cost the government up to $250 billion in lost revenue over a decade and lead to potential abuse of the system. Also, implementation challenges, including IRS enforcement and shifts in tipping behavior, could undermine the benefits of such tax exemptions.

Since January, 22 US states and over 36 cities and counties have raised their minimum wage, impacting 9.9 million workers, primarily women and minorities. Proponents of raising the minimum wage say it leads to higher earnings, reduces poverty, and increases employment stability. Critics contend it results in job losses, hurts small businesses, and increases prices for consumers.

In his classic 1962 book Capitalism and Freedom, Nobel Prize-winning economist Milton Friedman argues that a society cannot maintain political freedom without a robust commitment to free-market capitalism—and that for capitalism to function best, it must be free of government interference. It is hard to overstate the extent to which Friedman’s once-controversial ideas have triumphed. Over the past 40 years, governments across the world have moved to market-based solutions by reducing marginal tax rates, eliminating tariffs, privatizing public monopolies, and introducing choice in public education. Some might disagree about the effects of Friedman’s ideas—but no one can deny their influence.

The Wealthy Barber is David Chilton’s bestselling guide to becoming financially successful by following a handful of simple, easy-to-understand principles. These principles are illustrated using a fictional story about a teacher, an auto plant worker, and a small business owner who seek financial guidance from a barber who’s become wealthy by following the lessons he imparts.

Unlike some books on personal finance, The Wealthy Barber is not one size fits all: Chilton advises, for example, that you should only buy a house if it’s right for you, that day-to-day spending choices like whether to order take-out don’t matter too much if you’re implementing big-picture financial planning, and that not everyone needs life insurance.

Our guide compares and contrasts Chilton’s approach with those outlined in other popular personal finance books, such as The Simple Path to Wealth and The Total Money Makeover. We also provide background on developments in the financial and housing markets since the book was published.