Full Breakdown
New York Workers React to Hochul's Inaction on Trump's Tip Tax Policy
12/27/2025, 4:19:39 AM
Overview of the Situation
New York Governor Kathy Hochul and Democratic lawmakers have not extended President Donald Trump's "no tax on tips" policy to state income taxes, which has drawn criticism from bartenders and restaurant workers across the state. This policy, part of Trump's "One Big Beautiful Bill," allows qualified service workers to deduct up to $12,500 of tip income annually on federal taxes, significantly benefiting those reliant on tips for their income.
Impact on Service Workers
The decision not to adopt this federal policy has financial implications for many workers in the service industry. Bartenders and waitstaff, who often depend on tips, are feeling the pinch as their earnings are subject to state taxes. Rion Gallagher, a bartender, expressed frustration, stating, “If we weren’t taxed on our tips, we’d be able to save more.” Similarly, Zoe Kalodimos, a waitress, reported losing approximately $1,000 monthly due to taxes on her tips, which she describes as hard-earned.
Jackie Puttre, a manager and server, criticized state lawmakers for their inaction, saying, “It’s like losing money... it’s hard, especially when everything’s so expensive in life right now.” Many workers have noted that the increasing use of credit cards for tips exacerbates the tax burden, as cash tips previously provided a workaround.
Official Responses and Legislative Proposals
Despite proposals from state Senator George Borrello to match Trump's deductions, New York lawmakers have hesitated, citing concerns over losing more than $1 billion in revenue. Hochul's spokesperson indicated that the state is still evaluating the issue, leaving many workers uncertain about potential changes.
Critics, including Nassau County Executive Bruce Blakeman, have accused Hochul of neglecting the service industry, claiming her inaction could cost servers up to $3,000 annually. Hochul's administration has stated it is committed to finding ways to alleviate financial burdens on New Yorkers, suggesting that discussions regarding tax relief are ongoing.
Broader Implications
The lack of action on this policy has broader implications for the service industry in New York. Restaurant owners like John Winterman argue that tax breaks for eateries could enable them to pay their workers better wages, reducing reliance on tips. Sammy Musovic, another restaurant owner, warned that without matching the federal tip tax policy, many servers may leave New York City for better opportunities elsewhere.
Criticism and Opposition
The decision has sparked significant backlash from the service industry, with many workers feeling abandoned by state leadership. The sentiment among workers is one of frustration and disappointment, as they feel their livelihoods are being overlooked in favor of state revenue.
Verbatim Quotes
- “Screw her,” said Gallagher about Hochul's inaction.
- “It’s disgraceful. People live off of tips,” stated Kalodimos.
- “Thanks for nothing,” expressed Puttre regarding the state’s handling of the situation.
- “How do you survive on $40,000 in New York City? You don’t!” remarked Hannah Teal, a bartender.
What's Next?
As discussions continue, the future of the tip tax policy remains uncertain. The upcoming budget discussions may provide an opportunity for Hochul and lawmakers to reconsider their stance, potentially impacting the financial well-being of thousands of service workers in New York.
