"No Tax on Tips" Is an Industry Plant

[Omaha Steve]

Trump’s “populist” policy is backed by the National Restaurant Association—probably because it won’t stop establishments from paying servers below the minimum wage.

By Eyal Press July 28, 2025

Hearings before the Commerce Committee of the Arizona House of Representatives normally draw a modest crowd of lobbyists in suits. On March 19, 2024, a throng of people in more casual attire appeared. They wore matching green T-shirts adorned with the message “Save Our Tips.” The slogan caught the eye of Analise Ortiz, a Democrat on the committee. She assumed that the visitors were bartenders and waitstaff who had come to voice opposition to a bill that could lower their salaries.

The bill was called the Tipped Workers Protection Act, a name that disguised its true purpose. The legislation, if approved, would place an initiative on that November’s ballot to amend the Arizona constitution so that employers could pay tipped workers twenty-five per cent less than the state minimum wage, then $14.35 an hour. In Arizona, the minimum wage for such workers was already $11.35 an hour. The formula being proposed would allow employers to pay tipped workers just $10.76 an hour—a pay cut that would reduce a full-time server’s annual salary by twelve hundred dollars.

Ortiz, who had worked at a restaurant to help pay for college, knew from experience that servers were vulnerable to exploitation and mistreatment. She’d noticed that the chief supporter of the Tipped Workers Protection Act was the Arizona Restaurant Association, an industry lobby that represents the interests of owners. It had persuaded Republicans to introduce the measure as a way of blocking another ballot initiative, the One Fair Wage Act, which called for raising Arizona’s minimum wage to eighteen dollars an hour and insuring that by 2028 tipped workers would be paid that amount (without relinquishing their gratuities).

As the hearing progressed, Ortiz expected the workers in the green T-shirts to explain why they deserved a raise or, at the very least, did not want their salaries lowered. But, when three members of the group came forward to testify, all expressed support for the Tipped Workers Protection Act and opposition to the One Fair Wage Act, which they portrayed as an effort to steal their tips. A waitress named Jaime Sarli said, “If restaurants had to pay us more money and eliminated tips, why would I want to do this?” She explained that she made such “great money” as a server that she’d turned down salaried managerial positions. “I don’t want to work a minimum-wage job,” she said.

FULL story: https://www.newyorker.com/magazine/2025/08/04/no-tax-on-tips-is-an-industry-plant