Rep. Gabe Vasquez on Monday criticized the current federal tax law’s approach to tip taxation while advocating for permanent policy changes to benefit tipped workers during a visit to a local coffee shop.
The New Mexico Democrat donned an apron and worked alongside employees at Barelas Coffee House on Aug. 18, taking orders and serving food as part of his push for the Tipped Income Protection and Support Act, according to a statement from his office.
“Tipped workers deserve to take home more of their hard-earned pay, but the current sham version of ‘no tax on tips’ isn’t going to cut it,” Vasquez said in the statement. “The reality is, under the law Republicans just passed, every worker will still pay taxes on tips and overtime.”
Vasquez argued that the Republican-backed tax provisions provide only temporary relief that expires at the end of 2028, while workers continue to face rising costs for healthcare, food and utilities.
The congressman met with workers and advocates from One Fair Wage to discuss concerns about the current tax law’s impact on workers’ ability to make ends meet, his office said.
Vasquez pointed to several limitations in the current “no tax on tips” provision, stating that workers continue paying monthly taxes on tips and overtime, and that more than one-third of tipped workers already pay no federal income tax due to their tax bracket.
The representative is co-sponsoring H.R. 1314, the TIPS Act, which would permanently eliminate federal income taxes on tips and end the subminimum wage for tipped workers. Under current federal law, tipped workers in New Mexico earn a subminimum wage of $2.13 per hour before tips, according to Vasquez’s office.