On Friday’s “PBS NewsHour,” New York Times columnist David Brooks stated that the tax reductions for tips in the reconciliation bill are “32 billion, which in this kind of bill is peanuts. But it’s theatrical, no taxes on tips. Sounds pretty good. If you’re not paying attention, oh, that sounds good, no taxes on tips.”
Brooks said the tax provisions “will produce some growth. It’s highly stimulative to cut that much taxes. But the growth effects are, if you look at most of the serious estimates, like, under 1% added growth to the economy, sometimes significantly under 1%. So, that stuff is not measurable. It’s going to feel like status quo.”
He continued, “There will be a few theatrical things. And so, one of the things Trump talks about all the time is no taxes on tips. But when you actually look, how much is that? It’s 32 billion, which in this kind of bill is peanuts. But it’s theatrical, no taxes on tips. Sounds pretty good. If you’re not paying attention, oh, that sounds good, no taxes on tips. And then there’s a slight increase in the child tax credit. And that’s a genuinely good policy, by the way. And so, they’re doing that, and there are some baby bonds for people who want to build up life savings. So, these are not big programs, but they’re talking points for Republicans.”
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