Will The No Tax On Tips Act Help New York Workers?

There's some potential good news for certain New Yorkers! As prices rise, jobs get cut, and 401K accounts have lost lots of money, there is one thing the current administration is doing that will help some New Yorkers. While many of the recent decisions have hurt New York families, I think a lot of New Yorkers will be on board.

KEEP READING: Some New Yorkers Won’t Receive Full Social Security Benefits

Photo by Kelly Sikkema on Unsplash

According to NerdWallet,

"New York has one of the highest marginal tax rates in the country, topping out at 10.9%."

That is one of the biggest complaints people have about living in New York. There nine states that do not have income tax - Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. While it may seem like an ideal situation - no state income tax - the states find other things to tax to make up the revenue. Some examples are high property taxes, taxes on hospitality and tourism, and sales taxes. One thing for certain is that the government will find a way to get its money!

Democrats And Republicans Move To Eliminate Income Taxes

Photo by Laure Noverraz on Unsplash

KEEP READING: Prices Are Going Up At Two Major Retailers In New York

Both sides of the Senate are pushing forward with eliminating federal income taxes on tips. Democrats and Republicans unanimously passed the "No Tax on Tips Act," according to USA Today. I know this is music to the ears of many New Yorkers who rely on tips to survive. Before you start jumping for joy, there are some things to know. The act removes taxes on up to $25,000 of tip income for New Yorkers who make $160,000 or less, so there will still be taxes applied to any income above $25,000. The Bill now needs to be passed by the House of Representatives.

If it does pass, there is no set date that it would take effect, as of now. It will be costly to the Federal government. The Peter G. Peterson Foundation estimates that eliminating taxes on tips will cost around $110 billion in revenue over the next decade, driving the deficit up. While it won't help the U.S. balance the budget, I'm definitely in support of cutting taxes for working New Yorkers over wealthy billionaires!