Las Vegas slump blunts Trump's tip tax break for workers

Some Las Vegas hospitality workers say President Donald Trump's “No Tax on Tips” policy has done little to offset lower earnings as visitor numbers fall and tip income drops.

The Las Vegas Convention and Visitors Authority recorded a 7.5 percent fall in visitors last year, the largest non-pandemic decline since it began keeping records in 1970.

Aaron Mahan, a 53-year-old waiter who has worked in the city's restaurant industry for more than 30 years, said he is making about $2,000 to $3,000 less per month than before. He said his restaurant has laid off about 20 employees, reduced its hours and switched to a morning buffet format, cutting his contact with customers and reducing tips.

“I've lost about 75 per cent of my tips,” Mahan told AFP.

The Culinary Union, which represents 60,000 hospitality workers in Nevada, says thousands of members are now out of work or seeing their hours cut. Ted Pappageorge, the union's secretary-treasurer, said the tax break matters less when workers are not receiving as many tips.

Trump's 2024 campaign pledge allows workers to deduct up to $25,000 in tips from federal taxable income through the end of 2028. The US Treasury says more than 7.5 million Americans used the provision this year, claiming an average deduction of $7,000.

Trump told supporters at a Nevada rally this month that his policies were working. But some service workers on Fremont Street said fewer tourists and persistent inflation were eroding their earnings.