Republicans spent years sifting through the internal revenue code’s nuances when they previously attempted to alter American taxation. They aimed to change a sclerotic tax system with long-held conservative ideals by traveling the nation, holding hearings, and drafting early versions of a plan that was eventually passed in 2017.
This time, Republicans’ central ideas did not originate from a corporate accountant or a Washington think tank as they readied themselves for yet another chance to alter the way taxes are collected in the largest economy in the world. Instead, during the 2024 campaign, a waitress at President Trump’s hotel in Las Vegas complained to him about having to pay taxes on her tips.
The seemingly casual comment quickly turned into a key component of Mr. Trump’s victorious reelection campaign. Congress approved last week to establish a new tax exemption for tipped income for the upcoming years, a move that was welcomed by Republicans on Capitol Hill as well. Mr. Trump said the waitress helped him win Nevada, where many people labor for tips, at a White House gathering last month to promote the measure.
According to Mr. Trump, a legend was created. We had a huge victory in Nevada. Nevada is not won by Republicans. Nevada was won by us. I would like to express my gratitude to that young, attractive waitress. Many thanks.
Although the tips clause was ultimately only a small portion of the comprehensive package that lawmakers approved this week, it represented a significant shift in the Republican Party’s long-standing attitude to tax reduction. The new Republican package contains a number of new, populist, and temporary cuts that Mr. Trump crafted during the 2024 campaign in an attempt to gain the backing of important constituents, as opposed to the kind of methodical reexamination of the tax code that occurred in 2017.
In many respects, the current measure is the pinnacle of a historically conservative, supply-side ideology, even though Mr. Trump’s return to government steered the party’s tax agenda in a more populist direction. Many of the tax cuts implemented in 2017 will become permanent laws rather than temporary ones if Mr. Trump signs the legislation, which he is anticipated to do on Friday.
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