Trump and Harris agree on nixing taxes on tips. It’s a play for a key battleground state.

LAS VEGAS — When Donald Trump proposed ending the federal tax on tips during a rally here in June, he surprised elected officials and labor leaders — and privately unnerved many Democrats in Nevada.

That’s because the proposal targets a key constituency that both parties view as crucial to winning the election: Nevada’s 350,000-strong, largely immigrant, working-class hospitality employees, many of whom make high enough wages to have to pay taxes on tips.

Those Democrats and union leaders worked to neutralize the issue by embracing no taxes on tips, arguing that their overall economic agenda would do more to help the working class than Republicans and that voters couldn’t trust Trump to follow through on his promises, even if they liked his policy.

And then, this past weekend, Kamala Harris endorsed the idea as well — making the same political calculation as Trump, and marking the rare elevation in a nationalized political climate of an issue focused heavily on one state.

Economists on both the left and the right have panned ending taxes on tips as costly and ill-advised, and hardly anyone took the idea seriously before Trump raised it. And, if it becomes law, the idea is projected in some estimates to cost between $100 billion and $250 billion over a decade.

But the view is far different in Nevada, a Western battleground state whose six electoral votes could be crucial to deciding the outcome of the election — and where even Democrats fear Trump could make inroads with the state’s heavily Latino, once reliably Democratic service-industry workers .

“It should be a real focus of the Democratic Party, and I think we ought to be looking at it with some concern,” said Mark Longabaugh, a Democratic strategist who worked on Sen. Bernie Sanders’ presidential campaigns. “The inflation piece, the cost of living piece — which I also think Harris has done a nice job of addressing so far — is one of the reasons that I think that Republicans were eating into that constituency.”

Initially, Trump’s announcement of his political tip caught Democrats off guard. The proposal seemed so unrealistic before Trump raised it that the powerful Culinary Union — which has had a longstanding relationship with Harris and endorsed her on Friday and whose 60,000 rank-and-file members are among those Trump aims to peel off — hadn’t pushed for it among its top priorities. And even Harris’ announcement backing the tip policy appeared to surprise many on the national stage.

But not in Nevada, where the politics of the issue are clear. The vice president has strong relationships with Democrats like Rep. Steven Horsford, chair of the Congressional Black Caucus, and Sen. Catherine Cortez Masto, who was personally invited by Harris to pre-interview her vice presidential finalists, both of whom quickly accepted the policy.

“The tagline ‘one job should be enough’ is not a slogan. It’s a real standard that the Culinary, in particular, has set, and because Nevada has set the gold standard, in my view, that now can be a model for federal policy,” Horsford said. “So I’ve now started to work on legislation that mirrors that approach.”

Horsford provided his proposal — which includes both no taxes on tips and elimination of the subminimum wage, which does not exist in Nevada but allows tipped workers in some states to be paid as little as $2.13 an hour — to Harris’ staff ahead of the Saturday rally. The Harris campaign declined to specify whether her calls to raise the minimum wage specifically means for the sub-minimum wage, but she is expected to release more details of her economic platform later this week.

In Nevada, the tip policy may be critical to Harris, who is polling better than President Joe Biden had in recent battleground surveys, but who has yet to return to the levels of support Democrats drew from Latinos in 2020.

A poll of Latino voters from Somos PAC, a Latino voter mobilization group, released last week and taken in the days after Biden dropped out of the race showed Harris with 55 percent support and Trump at 37 percent among Latino voters across seven battleground states. In 2020, 61 percent of Latino voters cast ballots for Biden, while 36 percent voted for Trump.

The Culinary Union is known for its robust field operation that gives members leaves of absences from their jobs to turn out its members in support of Democrats at the ballot box, helping them win close elections. But many of those voters, even Democrats here concede, are also highly persuadable and disillusioned about high gas and grocery prices — making them a ripe target for the kind of working class message Trump is offering.

The former president, during his speech at the Republican National Convention in Milwaukee, said the policy was inspired by a Nevada waitress, who told him “the government is after me all the time on tips, tips, tips.” He added that the policy “turned out to be very popular, actually.”

Now, with Harris backing the no taxes on tips policy, the union has something to inspire its members who might otherwise be skeptical about the vice president.

“When Vice President Harris says she’s going to tackle fairness for tip earners and this issue of taxes on tips and raising the minimum wage for all workers with tip earners, that has credibility that we absolutely will campaign on at the doors with voters,” said Ted Pappageorge, secretary-treasurer of the Culinary Union.

Republicans have lambasted Harris for adopting the policy as part of the tug-of-war over service workers’ votes. Trump wrote on the social media platform Truth Social on Saturday night that Harris “copied” his policy for “political purposes,” and during a “Live on X” event with Elon Musk on Monday bemoaned that Harris is trying to be “more Trump than Trump.”

“Kamala has been courting service industry workers for years, and it seems her best attempt at swaying their votes is to latch onto a Trump policy,” said Jeremy Hughes, a Nevada GOP strategist. “It’s a win for service industry workers, but it comes at the expense of Kamala looking foolish.”

While the policy, which would need to be approved by Congress, applies to any tipped worker, it’s likely to have an outsize effect in Nevada, as the state has the highest concentration of tipped workers in the nation. Its service industry-workers typically make higher wages and have their tips taxed unlike most tipped workers in the rest of the country who do not make enough money to pay federal income tax on them.

Most Democrats in Nevada’s congressional delegation, like Horsford and Cortez Masto, have embraced the tip policy. Sen. Jacky Rosen quickly voiced support for it after the Trump rally — as her Republican opponent Sam Brown not only embraced the policy but said Trump “scooped” him on it — and the following month, both Rosen and Cortez Masto signed onto legislation sponsored by Sen. Ted Cruz (R-Texas) exempting tips from federal income tax. Horsford and Rep. Susie Lee (D-Nev.) signed onto the House version of the bill.