David Cooper, director of state policy and research at the Economic Policy Institute, a liberal think tank, says that if you look closely at U.S. income-tax data, you’ll see that very few workers will get any benefit from this measure. “Exempting tips from the federal income taxes would benefit a tiny fraction of workers – less than 3% of all tax units,” he says. “Among tipped workers in the bottom quintile (the bottom 20%) of income-tax units, only 34% would get any tax benefit.” The average benefit would be $220 a year for tipped workers in the bottom 20% of earners, and $800 a year for those in the next lowest 20%.
MarketWatch
May 27, 2025
“I’m not at all saying that workers won’t get anything,” said Heidi Shierholz, president of the Economic Policy Institute. “But I think that a meaningful share of the [federal] expenditures on a tax exemption like this will go to the employers of tipped workers.”
That might be why industry lobbyists have backed the proposal. “It’s not a surprise that the National Restaurant Association loves this,” Shierholz said, referring to the lobbying group that represents many of the country’s major restaurant chains.
VOX
May 27, 2025
But critics argue that the legislation may benefit a limited number of workers while potentially undercutting pay for a larger group. Many tipped workers are already in the lower income brackets and pay little federal income tax, according to the Economic Policy Institute, which warns that the elimination of taxes on tips could reduce pressure on employers to raise base wages.
Barron’s
May 27, 2025
The exemption would impact only a small fraction of the country’s workforce. The Yale Budget Lab estimates that some 4 million people worked in tipped occupations in the U.S. in 2023, representing about 2.5% of all U.S. workers. Others, such as the Economic Policy Institute (EPI), estimate tipped workers to make up a slightly higher percentage of about 5%
Time Magazine
May 27, 2025
Those federal government jobs offer long, stable tenure — 12 years on average, according to a report from the Economic Policy Institute, versus four years for all civilian workers, according to the Bureau of Labor Statistics.
Marketplace
May 27, 2025
According to analysis from the Economic Policy Institute (EPI), in addition to helping relatively few workers, exempting taxes on tips could potentially undercut pay for many more workers, would encourage tax avoidance, and would reduce pressure on employers to increase base pay, among other concerns.
Common Dreams
May 27, 2025
As for the investments from the Gulf governments, “these sovereign wealth investment funds already have a substantial investment portfolio in the United States,” Adam Hersh, senior economist at the Economic Policy Institute, told Public Notice. “So a lot of what’s being announced is probably stuff that they already are doing or were going to do anyway.”
Public Notice Substack
May 27, 2025
The average annual cost of child care in Arizona is $15,625 per year, which comes to $1,302 per month, according to the Economic Policy Institute.
KTAR News
May 27, 2025
California teachers have the highest pay in the country, making an average of $101,084 a year. The starting salary for new teachers averages about $58,409. Despite that, teachers still make about 80 cents less an hour than other college-educated professionals in the state with similar work experience, according to the NEA. The minimum living wage for the state is $69,601, according to the Economic Policy Institute.
EdSource
May 27, 2025