Donald Trump understands the old adage that taxation is theft, and to that end he has proposed some interesting ways to ease the burden on real working people through aggressive tax relief.
The “no tax on tips” proposal is almost universally accepted this time around — Kamala Harris even signed on to it — a sign that Trump has an innate understanding of smart policy. It's just his latest thinking that's alien to conservative orthodoxy but in line with his personal brand.
The former president scored two successes last week in his efforts to bring tax relief to real working people.
“No tax on overtime! People who work overtime are some of the hardest working citizens of our country,” Trump said. “It's time for the working man and woman to finally have a day off, and that's what we're doing because it's a great opportunity.”
Anyone who has ever worked an extra shift or three knows that this reprieve can be helpful if that happens.
Yet these proposals neglect those who are “among our country’s hardest-working citizens”: the Uber drivers and DoorDashers and professional freelancers who work with little relief.
They are not subject to overtime, because they do not have the protections of salaried employees. Many of them do not even get tips. Yet they are laid off, paying for their Medicare and Social Security bills with dollars whose real value is constantly declining. It is a scenario of diminishing returns, where one crisis can bring someone to the brink of bankruptcy.
Economic justice is a major argument for tax relief for the 1099 crowd; perhaps a temporary halving of the tax burden or a “freelancer credit” that helps those who run their business outside the corporate umbrella. There are ways to plan this.
And like Trump’s other tax proposals, this one would have political benefits for the all-important states.
From the Atlanta area to the Carolina metro areas of Raleigh and Charlotte, and to Philly, Pittsburgh, Phoenix, Las Vegas, Minneapolis and Milwaukee, many of these people have been left behind by the rise of artificial intelligence in the workplace and corporate rightsizing, and forced to take gig work at a time when the value of the dollar has plummeted.
As a result, rent is too high. The price of everything else is too high. And the government, which created the conditions that make the cost of labor cheaper than a living wage, should give gig workers and freelancers the same breaks that every other disadvantaged and economically precarious group gets in our tax code.
Trump's plan to not tax overtime addresses the injustice of working extra for a company that doesn't return the courtesy. Similarly, the plan to not tax tips recognizes that people who rely on gratuities earn their compensation in a way that carries a real economic cost.
Tax breaks for freelancers would also achieve the same goal.
This will free them from having to make difficult decisions about whether to delay getting health insurance or paying for another necessity because there is no room in the budget for it. It will also give them some degree of security in an economy that not only depends on them but also leaves them debt-free while they bear the capital costs of their profession.
Trump’s proposal would have disproportionate access to a group of unlikely voters in seven battleground states and beyond: gig workers, who might not hear anything relevant to their economic situation from Kamala Harris, but who might hear it from Trump.
Freeing freelancers is a politically sensible move. It gives Trump another opportunity to propose meaningful tax reform. And it potentially turns out a large number of unvoters, people who might otherwise skip the election, in states where even a small fraction of voters will make a difference in November.
