[Congressional Record (Bound Edition), Volume 157 (2011), Part 3]
[Extensions of Remarks]
[Page 4247]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         THE TAX FREE TIPS ACT

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                             HON. RON PAUL

                                of texas

                    in the house of representatives

                       Wednesday, March 16, 2011

  Mr. PAUL. Mr. Speaker, I rise to help millions of working Americans 
by introducing the Tax Free Tip Act. As the title suggests, this 
legislation exempts tips from federal income and payroll taxes. Tips 
often compose a substantial portion of the earnings of waiters, 
waitresses, and other service-sector employees. However, unlike regular 
wages, a service-sector employee usually has no guarantee of, or legal 
right to, a tip. Instead, the amount of a tip usually depends on how 
well an employee satisfies a client. Since the amount of taxes one pays 
increases along with the size of the tip, taxing tips punishes workers 
for doing a superior job!
  Many service-sector employers are young people trying to make money 
to pay for their education, or single parents struggling to provide for 
their children. Oftentimes, these workers work two jobs in hopes of 
making a better life for themselves and their families. The Tax Free 
Tips Act gives these hard-working Americans an immediate pay raise. 
People may use this pay raise to devote more resources to their 
children's, or their own, education, or to save for a home, retirement, 
or to start their own businesses.
  Helping Americans improve themselves by reducing their taxes will 
make our country stronger. I therefore hope all my colleagues will join 
me in cosponsoring the Tax Free Tips Act.

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