This story is featured in the Jan. 2025 print edition.

One of the key promises of the 2024 Presidential Election from both President Donald Trump and former Vice President Kamala Harris was to end federal income tax on tips — an idea that resonated with many middle-class workers.

While there is no universal tax rate on tips, the average in California is about 8.25%.

The tax cut would mean a slight increase in gross income for millions of Americans working in the service industry, including bartenders and delivery drivers.  

“Tips are the whole reason I have this restaurant job,” said Kaden Anderson, a bartender at Rod & Hammer Rock and an environmental management protection senior at Cal Poly. “I get paid pretty much minimum wage, and the tips are what makes it competitive. Without the tax, I would have to work one less day and make the same amount of money.”

Trump has not specified when he would initiate the policy.

According to a 2023 report from the U.S Bureau of Labor Statistics, food preparation and serving-related occupations make up the largest occupational group in San Luis Obispo county with 15,380 workers.

Depending on how policies are implemented, tax cuts on tips would decrease government spending ability by $6-10 trillion, impacting programs such as Medicare and Social Security.

“For those hotel workers and people that get tips – you’re going to be very happy because when I get to office, we are going to not charge taxes on tips, people making tips,” Trump said in a Las Vegas rally in June.

There are potential caveats which include the tax cut only marginally affecting relatively few workers and fears of tax cuts digging the U.S. further into economic debt ratio.

Still, just four million Americans make tips as a significant portion of their income, only 2.5% of the national workforce. The tax cut could hurt them more than it helps them in the long run by reducing their social security.

Before working at Woodstock’s Pizza SLO, environmental management & protection senior Carver Tunnell worked at a cash-only bakery where he believed under-the-table tips were normal.

“I kind of just thought that was how it was supposed to be,” Tunnell said. “I didn’t even realize it was a lot until I started working at Woodstock’s, and I didn’t question it until this recent election.”

While he makes a flat rate of $17 an hour, he earns an additional $4 an hour in tips when working in-house and about $8 an hour when working front-of-house.

“As someone who works in the service industry, you feel like you’re earning that tip,” Tunnell said. “You’re getting taxed on your wage, so is that not enough?”