‘No Tax on Tips’ Bill Rejected by California Democrats

By: Georgia | Published: Sep 04, 2024

Last week, California Democrats turned down a Republican-backed bill aimed at abolishing the state’s tax on tips for service workers. 

Despite bipartisan support nationwide, this refusal came as a surprise, especially with a similar stance being championed at the national level by prominent politicians.

Vice President's Echo of Bipartisan Goals

Vice President Kamala Harris recently promised to eliminate the federal tax on tips, aligning with her Republican opponents. 

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Vice President Kamala Harris speaking at an outdoor podium, gesturing with her hands, surrounded by green foliage

Source: VP/X

This move mirrored former President Trump’s pledge at a Las Vegas rally to ax the controversial tax “right away first thing in office.”

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The Public's Strong Opinion

A Newsweek poll highlighted a massive public backing for the idea, with 67% of Americans favoring tax-free tips.

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Close-up of a tip jar on a bar counter, featuring intricate designs, with a blurry background showing a bar setting

Source: Wikimedia Commons

Interestingly, the support slightly varies across party lines, suggesting a rare bipartisan consensus on the matter.

California Democrats' Sudden Block

In a dramatic turn of events, California Senate Democrats quickly squashed the GOP’s amendment without any debate. 

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A clear, sunny day view of the California State Capitol building, showcasing its classical architecture and the American flag waving at the top

Source: Wikimedia Commons

As the session’s clock ticked down, this decision drew significant criticism for ignoring a chance to relieve service industry workers.

A Senator's Disappointment

State Senator Rosilicie Ochoa Bogh expressed deep disappointment.

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State Senator Rosilicie Ochoa Bogh wearing a red blouse and positioned against a brick wall background

Source: Wikimedia Commons

She stated, “It is deeply disappointing that the Legislature chose not to consider a proposal that could have provided much-needed relief to California’s workers.”

Criticism from the Minority Leader

State Senate Minority Leader Brian W. Jones sharply criticized the refusal to debate the tax issue.

California Senate Minority Leader Brian W. Jones smiling in front of an American and California flag

Source: Wikimedia Commons

He accused Democrats of neglect and being “on the wrong side of this important issue.”

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Under the Rug: The Political Strategy?

Jones further criticized the Democratic decision to “sweep it under the rug” rather than addressing what he sees as a critical need for economic relief for workers. 

California Senate Minority Leader Brian W. Jones speaks at a podium, flanked by other leaders with American flags in the background at a press conference

Source: Senator Brian Jones/Facebook

He suggested this was a case of tactical avoidance rather than a policy disagreement.

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Media and Political Reactions

Following the decision, media outlets and political commentators questioned the motives behind the Democrats’ unanimous decision to reject the bill. 

A glass tip jar labeled "Tip

Source: Sam Dan Truong/Unsplash

Only a couple of notable senators abstained from voting.

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Silence from State Democrats

Post-vote, California State Democrats have remained tight-lipped.

A tip jar and a tissue dispenser sit on a wooden cafe counter, giving a neat and organized look to the service area

Source: Dan Burton/Unsplash

They have offered no official explanation or press release regarding their decision to block the bill on ending tax on tips.

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Broader Fiscal Challenges

This refusal comes amid broader fiscal challenges. 

Governor Gavin Newsom speaks energetically at a California Democrats event, with a vibrant blue and orange backdrop

Source: Wikimedia Commons

The California Legislature needed to implement austerity measures, including a temporary tax hike on some businesses, to address a looming $46.8 billion budget deficit.

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Delayed Promises

Earlier, California Democrats postponed a promised wage increase for healthcare workers. 

A group of healthcare workers, including doctors and nurses in scrubs and white coats, walking down a bright hospital corridor

Source: Luis Melendez/Unsplash

This delay, now set for January 2025, adds to the narrative of postponed relief and unfulfilled commitments.

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The Unending Debate

As the tip tax debate continues to resonate on the national stage, California’s decision represents a significant divergence from the emerging national consensus. 

A tip jar on a bar counter, creatively labeled with "Tips are like hugs without the touching," filled with dollar bills under soft lighting

Source: Wikimedia Commons

This leaves many to wonder about the future of tax reforms in the state and the nation.

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