In Nevada, Republicans are promoting a tax deduction on tips from a recent GOP megabill as a win for working-class voters, while Democrats criticize it as temporary and insufficient. The fight intensifies in a state where 5% of workers earn tips, double the national rate, ahead of midterms. Both parties aim to appeal to hospitality workers in tourism-heavy areas like Las Vegas.
The partisan clash over the no-tax-on-tips policy is playing out fiercely in Nevada, where Republicans seek to flip three of the state's four congressional districts. The deduction, pushed by President Donald Trump and included in an omnibus bill passed this summer, allows tipped workers to exclude tips from federal income taxes but lapses in three years unless extended by Congress.
GOP strategist Robert Uithoven, managing Lydia Dominguez's campaign against Rep. Susie Lee (D-Nev.), highlighted Trump's influence: “Everyone knows that that was a massively influential message by the president.” Trump won Lee's district, which includes many Vegas Strip workers, and carried Nevada. Republicans have spent millions on ads attacking Nevada Democrats like Lee, Steven Horsford, and Dina Titus for opposing the bill. NRCC spokesperson Christian Martinez stated: “Nevadans know who put more money back in their pockets, and it wasn’t the Democrat frauds who are trying to claim credit.”
Democrats counter that the policy offers little real benefit. Rep. Susie Lee said: “It’s a raw deal for tipped earners, because it’s not permanent, and it’s so much smaller than what the wealthiest Americans got out of that bill.” They note over a third of tipped workers earn too little to pay federal income taxes, and two in five rely on public assistance programs slashed by Republicans. DCCC spokesperson Lindsay Reilly described it as “temporary crumbs to working families... all to pay for permanent tax cuts for billionaires.”
Nevada Democrats championed similar ideas in 2024 campaigns, including Horsford's TIPS Act, which aimed to eliminate subminimum wages and provide broader relief. Horsford said: “My bill, the TIPS Act, does all the things that the tipped workers asked for... They listened to one person, Donald Trump, and not the workers.” Rep. Dina Titus added: “Exempting tips from income taxes is only part of the solution to increasing the wages of tipped workers.”
Democrats also blame Trump's strained relations with Canada for hurting Nevada's tourism economy, reducing tipped income. Lee noted: “When you have less tourism there, there’s less cars to park, there’s less rooms to clean, there’s less tables to serve.”
Culinary Workers Union Local 226, representing hospitality workers, criticized both parties in a late October letter to Treasury and IRS, demanding permanent extensions covering automatic gratuities and subminimum wage elimination. Secretary-treasurer Ted Pappageorge urged Democrats: “There has to be a real fight... about a message that is very clear that we are going to tackle the cost of living and support working class, kitchen table voters.” The union plans independent outreach to voters ahead of midterms.