Democratic states are insisting on taxing tips to defy Donald Trump. That’s right—a popular piece of legislation that is seemingly bipartisan has been met with partisan defiance from blue states with representatives who favor rebelling against Trump over the well-being of their constituents.
The One Big Beautiful Bill includes a No Tax on Tips stipulation that prevents the IRS from grabbing cash tips under $25,000. Linemen and factory workers are not taxed on overtime under this bill as well. Illinois, Maine, New York, California, Massachusetts, Connecticut, Hawaii, and the District of Columbia are deliberately preventing residents from enjoying this tax break without valid cause.
Illinois claims it needs to continue taxing tips at the state’s 4.95% flat income tax level because the state needs the revenue. Common sense shows us that governments ALWAYS spend more than they earn in taxation. Senator Craig Wilcox is attempting to introduce legislation to push back against Governor JB Pritzker and the Illinois Democrats. “This is effectively a tax hike on the people who can least afford it,” Wilcox stated. “Democrats cannot claim to support working men and women while blocking measures that would provide real, substantive relief.
Colorado maintains it is “decoupling” from federal tax provisions, formalizing taxes on tips and other forms of income. Governor Jared Polis of Colorado said that the change would cost the state $90 million annually, and the state should decide how it steals and redistributes money through social programs. Fields of Advance Colorado accused lawmakers of “balancing the budget on the backs of workers” as legislators passed bills such as HB 1296 that demand the state receive a portion of overtime pay.
New York Comptroller Thomas DiNapoli criticized the tax deduction as perhaps too democratic. Only 6% of New York workers receive taxable tips, after all, and they apparently deserve to be shaken down by Uncle Sam like the rest of us.
These governors are admitting that their budget deficits are too steep to benefit the people in any way. These are the same people who tout raising the minimum wage during campaigns to pretend they are for the working man. A majority of these unfunded state budgets are spent on social programs. There is simply no logic to this political theatre aside from “anything but Trump.”