Beltway Buzz, August 16, 2024

POTUS Candidates Want No Taxes on Tips

As the presidential campaign heats up, Vice President Harris and former President Trump have both voiced support for the same policy concept: exempting employee tips from taxation. Harris’s proposal would exempt tips from federal income taxes and raise the federal minimum wage, while Trump’s would exempt tips from both income and payroll taxes. Trump announced his proposal at a June 9, 2024, rally in Nevada, while Harris announced her proposal at an August 10, 2024, rally in—you guessed it—Nevada. The Silver State could play a pivotal role in the November elections—with regard to both the U.S. Senate and White House—and it is perhaps no coincidence that a large number of tipped workers reside there. Some additional thoughts on this “who wore it better” policy proposal are below:

• Just days after Trump’s June 9 announcement, Republican Senators Ted Cruz (TX), Steve Daines (MT), Rick Scott (FL), and Kevin Cramer (ND) introduced the No Tax on Tips Act. The bill would amend the Internal Revenue Code to allow workers to claim a deduction at filing equal to 100 percent of the “cash tips”—cash, credit and debit card charges, and checks—they received during the taxable year. The Democratic senators from Nevada, Jacky Rosen and Catherine Cortez Masto, are co-sponsors of the bill. 
• Tips and workers who receive cash tips are not exactly new subjects of public policy debates. In 2021, the U.S. Department of Labor (DOL) finalized a regulation that changed the circumstances in which an employer can take a “tip credit” to satisfy its minimum wage obligations.
• More tax talk can be expected. Many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are expiring at the end of 2025, so tax policy debates are expected to dominate the first session of the 119th Congress. The Buzz has been monitoring a bill, the Tax Relief for American Families and Workers Act, which would extend some of the TCJA’s provisions. Despite having received bipartisan passage in the House, that bill has stalled in the U.S. Senate.

More on Walz

Speaking of campaign promises, vice presidential candidate Tim Walz addressed the American Federation of State, County and Municipal Employees (AFSCME) 2024 convention this week. Obviously, the Harris/Walz labor and employment policy agenda featured prominently in Walz’s remarks. Walz promised that Harris would sign the Protecting the Right to Organize (PRO) Act into law and would also prohibit employers from speaking to employees about the pros and cons of unionization. Walz enacted this later policy prescription into law in Minnesota, and National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo has made banning employer speech a priority—something that the three Democratic members of the Board indicated in a recent decision that they are keen to address.

Fed Court of Appeals: Robb Firing Was Legit

This week, the U.S. Court of Appeals for the Sixth Circuit ruled that President Biden’s dismissal of Peter Robb, the NLRB’s general counsel, in January 2021 was lawful. The court determined that the National Labor Relations Act “contains no provision restricting the President’s removal power” of the Board’s general counsel, and that even though Congress set the general counsel’s term at four years, “[t]he Supreme Court has long held that a fixed term of office, without any additional limitation, does not impact the President’s discretionary removal power.” The Fifth and Ninth Circuits have also upheld Robb’s dismissal. Obviously, these decisions could play a factor in General Counsel Abruzzo’s continued tenure during a potential Trump administration in 2025.

Foxx Seeks Answers From Su on Independent Contractor Regulation

Virginia Foxx (R-NC), the chair of the House Committee on Education and the Workforce, continues to press the DOL and Acting Secretary of Labor Julie Su on the agency’s regulatory agenda. Late last week, Rep. Foxx sent Su a letter requesting “information about the administration’s efforts to eliminate the independent contractor model and classify as many workers as employees as possible in order to increase government control over workers.” The letter is a follow-up to previous questions for the record (QFRs) that Rep. Foxx submitted following Su’s May 1, 2024, appearance before the committee. Rep. Foxx concludes that “DOL’s failure to provide complete responses to oversight on this matter could lead the Committee to take compulsory action.” The letter is further evidence demonstrating that the DOL’s independent contractor regulation, which is still the subject of multiple legal challenges, could be the subject of further regulatory and/or legislative efforts in 2025.

“Time is Money” Initiative

On August 12, 2024, the Biden administration launched its “Time is Money” initiative, which is intended “to crack down on all the ways that corporations—through excessive paperwork, hold times, and general aggravation—add unnecessary headaches and hassles to people’s days and degrade their quality of life.” The initiative touts pending actions from various agencies that would allegedly make it easier to cancel subscriptions, “to let customers talk to a human by pressing a single button,” and “crack down on ineffective and time-wasting chatbots used by banks and other financial institutions in lieu of customer service.” Of course, for anyone who has prepared their own taxes, waited in line at the DMV, or opened a business, this probably comes off as a “people in glass houses” initiative.

President Tyler: Quite a Riot

On August 16, 1841, President John Tyler vetoed legislation that would have established the Second Bank of the United States. The bank bill was pushed by Senator Henry Clay of Kentucky, leader of the Whig Party, and was viewed as a way to push the country out of troubled economic times. President Tyler, also a Whig, defied his party by vetoing the bill, arguing it infringed on states’ rights (banks were quite an issue in those days). The veto led to a massive riot two days later on the White House lawn, where a drunken mob fired guns and hung Tyler in effigy. The riot led Congress to establish the Auxiliary Guard in Washington, D.C., to beef up security and police presence, particularly at night.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 16: Peace, Justice, and Strong Institutions

The article discusses various labor and employment policies, tax reforms, and regulatory agendas that are connected to the SDGs mentioned above. These SDGs aim to address poverty, promote decent work and economic growth, reduce inequalities, and ensure peace, justice, and strong institutions.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 1.4: By 2030, ensure that all men and women, in particular, the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance.
• SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• SDG 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.
• SDG 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

The targets mentioned above are relevant to the issues discussed in the article, such as ensuring equal rights to economic resources, achieving full and productive employment, promoting equality through fiscal policies, and ensuring access to justice.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.4.2: Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure.
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group, and persons with disabilities.
• Indicator 10.4.1: Labour share of GDP, comprising wages and social protection transfers.
• Indicator 16.3.3: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms.

These indicators can be used to measure progress towards the identified targets by assessing factors such as land tenure rights, earnings differentials, labor share of GDP, and reporting of violence victimization.

Table: SDGs, Targets, and Indicators

Source: natlawreview.com