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No Tax on Tips? Democrats Could Learn Something From Effective GOP Pandering to the Working Class
If the Democrats ever hope again to be the party of the working class, they should never have allowed the Republicans to get credit for such a popular, if not flawed, proposal.
Jun 01, 2025
“This legislation will have a lasting impact on millions of Americans by protecting the hard-earned dollars of blue-collar workers, the very people who are living paycheck-to-paycheck. I urge my colleagues in the House to pass this important bill and send it to the President’s desk to be signed into law.” —Senator Ted Cruz (R-Texas)
Ted Cruz? How could this labor-hating showboat get away with posturing as a defender of the working class – especially low-wage workers who live on tips? This is the same Ted Cruz who gets most of his campaign funds from those who got rich by exploiting low-wage workers. How did Cruz, of all people, take this issue away from the Democrats, the once so-called party of the working class?
It seems the Democrats didn’t care about this issue. It was viewed by the party policy makers as flawed and not worth the effort. They only got on board after Trump trumpeted the policy change, which they then noticed was wildly popular with the public.
What does it say when Ted Cruz appears to be considering the needs of working-class people before the Democrats get around to them?
Even today, after Cruz and Trump, my progressive colleagues disparage removing taxes on tips. They correctly point out it would be better to increase the federal minimum wage for all workers, which now stands at $7.50, and $2.13 for tip workers. $2.13? Further, they argue that low-wage workers would be better served with the passage of paid family leave, refundable tax credits, and extensive universal health care.
Those are all good ideas, but wouldn’t no tax on tips complement those policies?
The progressive Economic Policy Institute claims that no tax on tips “will harm more workers than it helps.” It will
- “Help very few workers and undermine pay increases for many more.
- Expand the use of tipped work—a system rife with discrimination and worker abuse— potentially leading to consumers being asked to tip on virtually every purchase.
- Deplete state and federal budgets and create new avenues of tax avoidance, especially for high earners.”
EPI makes similar arguments for no tax on overtime, saying the policy will:
- “Encourage excessive hours of work while exacerbating inequities between workers able to work long hours and those who cannot.
- Put downward pressure on base wages.
- Open up a tax loophole easily gamed by high earners that would drain public budgets while further complicating the tax system.”
I have enormous respect for my brothers and sisters at the EPI. They do excellent research on behalf of working people. But in this case, I fear they are missing or ignoring the bigger political picture. The Democrats and the left should never allow the Republicans to position themselves as working-class heroes. Helping low-wage workers should be what Democrats do and no tax on tips and no tax on overtime—done right—should have been part of the party’s package before it became part of Ted Cruz’s.
For those of us who have worked for tips and valued overtime pay, getting a tax break simply means more money in our pockets. It is an immediate pay raise, even if it may not be the best way to improve the standard of living for working people. I’m having trouble understanding why a direct good for some is not a good thing.
Most tipped workers earn low wages in the food industry and in gig services like Uber. They are grossly underpaid. So much so that many don’t work enough to pay income tax and so won’t benefit, but for those who make enough getting a tax break will help. That’s appealing, which is why about 75 percent of Americans support the idea, according to a 2024 Ipsos survey.
The same goes for overtime. Nearly two-thirds of all workers are forced to work overtime as a condition of their employment. Work weeks are often extended to 50 hours or more as employers seek to avoid hiring new workers and paying their benefits. It is cheaper to run the existing workforce into the ground. But those extra hours at time-and-half are taxed more heavily, workers know, making it feel like all that extra work is getting you nowhere. A tax break will be welcomed, not shunned, by those workers.
Trump filled the breach, making the proposal in a speech in Las Vegas in June 2024, and the Harris campaign chimed in half-heartedly in support of the proposal after she entered the race in July. The two Democratic senators from Nevada, the state with the most service workers per capita, fully supported Cruz’s effort.
After the bill passed unanimously in the Senate last week, Chuck Schumer, the minority leader, belatedly weighed in with: “Working Americans—from servers, to bartenders, delivery drivers, and everything in between—work hard for every dollar they earn and are the ones who deserve tax relief, not the ultra-rich.”
Nice words for the Ted Cruz-sponsored bill, but why wasn’t a Democrat proposing this appealing policy? And where was Chuck, years ago, when runaway inequality was decimating the lives of low-wage tip workers? He was celebrating a strategy that cast aside working people in favor of higher income, more educated Republican voters. As he infamously put it in 2016:
"For every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs in Philadelphia, and you can repeat that in Ohio & Illinois & Wisconsin.”
In addition to picking up Republican votes, he wants those fat campaign donations especially from those “moderates” working on Wall Street.
If the Democrats ever hope again to be the party of the working class, they should never have allowed the Republicans to get credit for such a popular proposal. What does it say when Ted Cruz appears to be considering the needs of working-class people before the Democrats get around to them?
It didn’t happen because, I truly fear, that the Democrats really have no strategy and no desire to become again the party of the working class. They seem quite content to allow the Republicans fill the breach. Good riddance!
Meanwhile, the Republicans crush the government workers who protect our air and water, workplace safety, workers’ rights to organize, public health programs, and scores of programs and projects designed to make sure that working people aren’t exploited and damaged by corporate interests that treat them as fodder in a profit-making machine. No tax on tips is exquisite Republican pandering, and an effective one.
Which leaves us at a crossroads we can no longer avoid or pretend just isn’t there or view as too difficult to achieve. The billionaires indeed have two parties. We need one of our own.
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Blaming Trump Tariffs Alone for 20,000 Laid Off UPS Workers Hides Key Factor: Stock Buybacks and Wall Street Greed
Blaming the Trump tariffs for every sin imaginable may be emotionally satisfying, but while it may end up being a factor, it is not the whole story here.
May 01, 2025
It’s such a tempting storyline: UPS announces that it will lay off 20,000 workers, citing “changes in the global trade policy and new or increased tariffs.”
There you have it. A perfect example of how Trump’s tariffs are screwing working people, many of whom voted for him.
Or is it?
UPS, like every major U.S. corporation, is in business to extract as much wealth as possible and shovel it to its shareholders and top executives in the form of stock buybacks and dividends. And like every major corporation, UPS will pay for that wealth extraction by laying off as many workers as possible. That may reduce the production of goods and services, but so be it, if it generates more money for shareholders and executives. In big business today, wealth extraction always comes first.
This is not a company struggling to make ends meet.
Let’s look at some of UPS’s numbers. In 2023, the company authorized $5 billion in stock buybacks, starting in 2024 with $500 million and another $5.5 billion in dividends. In 2025, UPS plans to spend another $1 billion on stock buybacks, as well as $5.5 billion more in dividends. In 2024, not incidentally, UPS posted $8.5 billion in profits. This is not a company struggling to make ends meet.
(Stock buybacks are when a corporation uses its own funds to repurchase shares and thereby raise the price of those shares, which greatly pleases its largest shareholders. Before deregulation in 1982, a company buying its own shares was considered illegal stock manipulation.)
To maintain this wealth pump for its investors and top officers, who are primarily compensated with stock incentives, cash needs to be generated and replenished. The simplest way to do that without acquiring more debt is to lay off workers.
Before the deregulation of Wall Street that came with the Reagan and Clinton administrations, no corporate manager would dare to lay off workers during profitable periods. To do so was a sign of poor management, a blemish on the CEO and his/her team. Workers and their communities were considered corporate stakeholders, right along with shareholders.
But after deregulation, the only stakeholder that mattered was the shareholder. The hell with workers and their communities. Companies began moving corporate headquarters to the sites of the highest governmental bidders, and in short order layoffs during good times became a symbol of smart management. Greed is good reigned supreme. (Please see Wall Street’s War on Workers for the gory details.)
Do not lend any credibility to corporate PR announcements. Their job is to do all they can to obscure how much they are shoveling to Wall Street.
The Teamsters union, which represents 300,000 UPS hourly workers, will fight these recently announced layoffs. Sean O’Brian, who spoke at the Republican national convention in 2024, sees any Teamsters layoffs as a violation of the contract:
United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement. If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way. But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.
We can be sure that the Teamsters will be looking closely at UPS’s finances, especially the large amounts going to stock buybacks and dividends. They will not sacrifice their members’ jobs on the altar of obscene wealth extraction.
Will the Trump tariffs have a major impact on UPS jobs?
We just don’t know that yet. But one thing we know for sure: Do not lend any credibility to corporate PR announcements. Their job is to do all they can to obscure how much they are shoveling to Wall Street. Their credo: The extent and consequences of the wealth extraction machine must never be revealed.
Blaming the Trump tariffs for every sin imaginable may be emotionally satisfying. But letting larger corporations and their Wall Street handlers off the hook when it comes to job destruction, which the Democrats have done for more than a generation, is in large part why we have Trump in the first place.
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Warren to Trump Treasury Chief: Did You Give Wall Street Execs Insider Info on Trade Talks?
"You owe Congress and the public an explanation for why you and other White House officials appear to be providing Wall Street insiders secret information on the tariffs," wrote Democratic Sen. Elizabeth Warren.
Apr 28, 2025
Democratic U.S. Sen. Elizabeth Warren is pressing Treasury Secretary Scott Bessent for answers following reports that officials inside President Donald Trump's White House have been providing Wall Street executives with advance notice about potentially market-moving trade talks with other nations, including China and India.
In a letter to Bessent dated April 25, Warren points to a Bloombergstory noting that Bessent "told a closed-door investor summit" that the "tariff standoff with China cannot be sustained by both sides and that the world's two largest economies will have to find ways to de-escalate."
The summit, which took place last Tuesday, was hosted by the Wall Street behemoth JPMorgan Chase in Washington, D.C. Bloomberg observed that the S&P 500 rose nearly 3% after Bessent's comments were leaked.
CNN additionally reported that Bessent's private assessment of the U.S.-China standoff "gave a boost to a Wall Street rally that had taken shape earlier on Tuesday, with all three major U.S. stock indexes hitting their highest levels of the day after Bessent's remarks were made public."
"Chaos, confusion, economic damage, and opportunities for corruption have become the hallmark of President Trump's rollout of his tariff policies."
Warren wrote in her letter that the JPMorgan event "was not open to the public or media" and expressed concern that Bessent "provided a room full of wealthy investors and Wall Street executives exclusive, advance tips about the administration's trade policy, potentially creating the opportunity for insider trading or other financial profiteering by well-connected friends of the administration."
"Chaos, confusion, economic damage, and opportunities for corruption have become the hallmark of President Trump's rollout of his tariff policies," Warren continued. "President Trump's opaque decision-making on tariffs and frequent, seemingly random changes of course have created a scenario where wealthy investors and well-connected corporations can get special treatment, receiving inside information they can use to time the market, or obtaining tariff exemptions that are worth billions of dollars—while Main Street, small businesses, and America's families are left to clean up the damage."
"You owe Congress and the public an explanation for why you and other White House officials appear to be providing Wall Street insiders secret information on the tariffs, while withholding that information from the public," the senator added, demanding that Bessent answer a series of questions—including who attended the event and how much time passed between his private remarks and press reports on the event.
Warren sent the letter a day after Fox Business correspondent Charles Gasparino reported that unnamed officials inside the Trump White House have been "alerting Wall Street execs they are nearing an agreement in principle on trade with India," heightening concerns that the administration is effectively encouraging insider trading.
Trump told reporters Friday that he "can't imagine" anyone in his administration tipping off Wall Street executives about nonpublic trade developments.
"I have very honorable people, that I can say," the president said. "So I can't even imagine it."
On Monday, a group of congressional Democrats warned the White House of "potential violations of federal ethics and insider trading laws by individuals close to the president with access to nonpublic information."
The Democratic lawmakers pointed specifically to a spike in the volume of call options—essentially bets that a stock price will rise—shortly before Trump announced a partial tariff pause earlier this month.
"We therefore urgently request a full accounting of the periodic transaction reports for all senior White House and executive branch employees since the start of the administration, and we ask for your commitment to transmit all reports to the Office of Government Ethics (OGE) to be made public, as was done during the first Trump administration," the lawmakers wrote Monday. "By failing to take these steps, the administration would be withholding critical information from the American people regarding potential violations of federal ethics and insider trading laws."
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