(The Center Square) – Stealing a page from President Donald Trump’s campaign playbook, New York Republicans are calling for the elimination of taxes paid on tips and overtime as part of broader efforts to reduce the state’s high cost of living.
A pair of proposals filed by GOP lawmakers would, if approved, eliminate state income taxes on cash tips which are considered wages or compensation and do away with state income taxes on overtime pay.
One bill would create a tax deduction for tipped wages; another proposal would deduct federal adjusted gross income from any overtime compensation
Senate Minority Leader Rob Ortt, R-North Tonawanda, said the tax cut proposals are part of the “Liberate New York” agenda and would “provide relief for hardworking New Yorkers” who are struggling amid lingering inflationary costs.
The proposal mirrors Trump’s pledge during last year’s presidential race to eliminate federal taxes on tips to help casino workers, restaurant servers and others who receive tipped wages.
Ortt urged New York’s Democratic leaders to get behind the plan, pointing out that Trump’s rival in the presidential race, Democrat Kamala Harris, also backed the idea of doing away with taxes on tips.
“I know she didn’t agree with everything with President Trump, but she did agree on this because it was the right thing to do,” he said.
To be sure, the Republican proposal faces long odds in the Democratic-majority Legislature, which would need to approve the plan before it lands on Democratic Gov. Kathy Hochul’s desk for consideration.
Republicans have long said New York’s highest-in-the-nation tax burden and a business sector that is struggling under excessive regulations, as well as rising labor costs, are driving people out of the state.
New York lost an eye-popping $24.5 billion in state-adjusted gross income in 2021 as residents fled to New Jersey, Florida and other low-tax states, according to the latest Internal Revenue Service figures.
Nowhere was the state’s outmigration more prevalent than in New York City, the nation’s largest city with a population of 8.2 million. The Big Apple had a net loss of nearly 78,000 residents between 2022 and 2023, according to IRS data.
“Middle-class families need relief, not more government bloat,” state Sen. Steven Rhoads, R-Wantagh, said in remarks. “If the Senate majority is actually serious about making New York affordable – not just growing the budget – they’ll put these bills in the budget. It’s time to cut the nonsense, cut the taxes, and let New Yorkers catch a break.”
