TIPS

Part of the Reagan Tax Bill of 1981 included taxing of TIPS. Trump has proposed that if elected he will ask congress to rescind the taxing of TIPS. This means that people will be able to keep more of what they earn. This as opposed to canceling student debt which means that money will be taken from those who earn it and given to those who don't. People who earn TIPS are mostly in the low to middle income groups and this helps to close the income gap. Among the more than 6 million people who reported tips on their returns that year, taxpayers disclosed nearly $6,250 on average. This doesn't mean that people will save $6,250 on their tax bill it means they will save the tax on $6,250 which would be about $600 per year for most people.