The Harris tax policy that isn’t about taxes

Aug 12, 2024

Vice President Kamala Harris speaks during a campaign rally at the University of Nevada in Las Vegas.

Vice President Kamala Harris speaks during a campaign rally at the University of Nevada in Las Vegas on Saturday. | Ronda Churchill/AFP via Getty Images

PAROCHIAL POLITICS — Vice President Kamala Harris hasn’t been very forthcoming with policy proposals so far, but this weekend she laid down one clear campaign promise: No more taxes on tips for service or hospitality workers.

During a stop in Las Vegas during her swing state tour, buttressed by members of the city’s powerful Culinary Union — which endorsed her less than a day prior — Harris laid out the plan, pitched as a boost for the bottom line of many of the state’s residents.

The issue is no small matter in Nevada. A 2023 report showed that 43 percent of Nevada’s gross domestic product is generated by the state’s tourism industry, centered around Las Vegas and staffed by a veritable army of service workers who live in and around the city. The supremacy of the industry — and the downstream effect of many of the state’s jobs catering to hospitality — means that many of the voters in the swing state are particularly concerned with how their taxes are broken up between tips and other wages.

The Nevada-friendly proposal represents a familiar presidential election year feature: the parochial state priority that shapes national policy outcomes. Former President Donald Trump was actually the first in the campaign to endorse the no taxes on tips concept. In a peevish response to Harris’ plan on Truth Social, Trump wrote that “this was a TRUMP idea - She has no ideas, she can only steal from me.”

The proposal, however, is less about good policy than the politics of winning a key swing state. Nevada was decided by just 27,000 votes in 2016. In 2020, it was decided by 34,000. If modern presidential elections are won among a sliver of voters in a sliver of swing states, then it makes political sense to cater to the interests of those battleground states — even if some economists and tax-policy experts worry that halting taxation on tips will have little impact on the taxes that service workers pay while hampering their longer term eligibility for programs like Medicare and Social Security.

It’s a feature, not a bug, of the presidential landscape. Before the no taxes on tips proposal, White House hopefuls were forced to pay lip service to a potential nuclear waste site in Nevada’s Yucca Mountain, located just about 100 miles from Vegas, or suffer the consequences. In 2008, Hillary Clinton ran ads suggesting she was the only Democratic candidate who could be trusted to shut it down. In 2020, after Trump’s own energy department put together plans to make Yucca Mountain a permanent nuclear waste site, Trump himself appeared to reverse course in a tweet.

This year, Harris’ changed circumstances appear to have colored her judgment in Pennsylvania, one of the fracking hubs of the U.S. In the 2020 Democratic primary, Harris came out against fracking as much of the Democratic field raced to capture a resurgent left wing of the party. But in 2024, with the left exerting less influence over the party and — more importantly — with Pennsylvania emerging as the most essential swing state, Harris quickly insisted that her views had evolved on the issue.

If Iowa and Florida were more competitive this year, it’s likely there would be a more fulsome discussion of their hot-button issues. Iowa’s position as a key early presidential state has long influenced ethanol policy — Iowa is the top corn producing state in the nation — just as American policy toward Cuba has long been shaped by Florida’s treasure trove of electoral votes. After President Barack Obama attempted to normalize relations with Cuba’s government, Cuban Americans who live largely in South Florida — and have no love for Cuba’s dictatorship — mostly shifted towards Trump, who thrust the U.S. and Cuba back into a period of hostility during his time in office.

As Harris’ policy platform trickles out ahead of the DNC, it’s worth paying attention to what her priorities are and where she’s announcing what — necessity is the mother of political reinvention.

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What'd I Miss?

— FBI probing hack of Trump campaign: The FBI has opened an investigation into the alleged hacking of Donald Trump’s presidential campaign, bureau officials confirmed today. An FBI spokesperson declined to elaborate on the scope of the probe or any suspects. But a report issued last week by Microsoft stated that Iranian hackers sent a “spear phishing email” to an official with an unnamed presidential campaign.

— Trump shooting task force requests first briefing with key agencies: The bipartisan House panel tasked with investigating the attempted assassination of former President Donald Trump is taking its first official step: requesting a staff briefing with key agencies. Reps. Mike Kelly (R-Pa.) and Jason Crow (D-Colo.) — the task force chair and top Democrat, respectively — sent a letter today to Homeland Security Secretary Alejandro Mayorkas and acting Secret Service Director Ronald Rowe Jr., as well as a separate letter to Attorney General Merrick Garland and FBI Director Christopher Wray. They requested any documents or records that have already been handed over to the House and Senate.

— House Freedom Caucus sets its terms for September spending fight: The House Freedom Caucus is ramping up pressure on GOP leaders to back a short-term funding bill into early 2025 — seeking to punt major spending decisions into a potential Trump administration. The ultra-conservative group’s official position, which requires the support of 80 percent of its roughly three-dozen members, is a preview of the spending fight Speaker Mike Johnson faces in September. Congress must clear a funding bill by Oct. 1 to avoid a government shutdown. Lawmakers are expected to pass a stopgap that keeps spending levels steady, known as a continuing resolution, but it’s unclear if they’ll punt the fight to later this year or next.

Nightly Road to 2024

NC GREENLIGHTS RFK JR. — Robert F. Kennedy Jr. can remain on North Carolina’s presidential ballots after a state judge today refused to block printing his name and those of other candidates of the “We the People” party that was recently certified by the State Board of Elections, reports The Associated Press. Wake County Superior Court Judge Keith Gregory rejected the preliminary injunction request by the North Carolina Democratic Party, which challenged the board’s decision last month that declared We the People an official party. The board had voted 4-1 to recognize We the People, which has been used by supporters of the environmentalist and author to get Kennedy on the ballot in a handful of states.

PRIME-TIME PROTESTS — Thousands of demonstrators are expected in the streets and the parks of Chicago for next week’s Democratic National Convention, most of them to protest the U.S. role in the war in Gaza, reports The New York Times. But officials are concerned about the potential for a more embarrassing spectacle: prime-time disruptions inside the arena itself.

About 30 uncommitted delegates representing the Democratic primary voters who opposed President Biden — largely over what they see as his tilt toward Israel in the brutal war launched after the Hamas attacks last October — will have unfettered access to make their voices heard. State party leaders have for months worked to defuse tensions and head off a high-profile clash. Those diplomatic efforts, along with the elevation of Vice President Kamala Harris to replace Biden as the Democratic nominee, have yielded progress, people on both sides said. But as of now, the delegates are still planning to make their presence at the proceedings known, threatening the overwhelming display of unity that Democrats hope to project heading into the fall campaign.

HE’S BACK — Donald Trump revived his X account today for the first time in a year, hours before he’s slated to sit down with the platform’s billionaire owner Elon Musk for a live interview.

The former president posted a two-and-a-half minute ad he’s previously shared on other social media platforms and at campaign events, a video compilation painting himself as a political target in the face of multiple criminal indictments.

He went on to post at least four more times within the next two hours, promoting his 8 p.m. EDT interview with Musk and hitting Vice President Kamala Harris as a “SAN FRANCISCO RADICAL.” His last activity on the platform had been sharing his Fulton County Jail mugshot in 2023, and before that, an announcement two days after the Jan. 6, 2021 insurrection that he would not attend President Joe Biden’s inauguration.

TRUMP SLUMP — Shares in Trump Media and Technology Group fell slightly more than 5 percent today after the company reported scant revenues and a net loss in its first full quarter as a public company, reports NBC News.

Shares in Trump Media have been subject to significant volatility since it began trading in late March thanks in part to competing bets from Wall Street traders about how much the stock would fall.

AROUND THE WORLD

Russian President Vladimir Putin listens to acting Governor of Kursk region Alexei Smirnov during a meeting via videoconference at the Novo-Ogaryovo state residence outside Moscow, Russia, Thursday, Aug. 8, 2024. (Gavriil Grigorov/Sputnik, Kremlin Pool Photo via AP)

Russian President Vladimir Putin listens during a meeting via videoconference at the Novo-Ogaryovo state residence outside Moscow. | Gavriil Grigorov/Sputnik, Kremlin Pool Photo via AP

BLAME GAME — Ukraine’s incursion onto Russian soil has triggered a round of finger-pointing in Moscow at the military.

Russian President Vladimir Putin held an operational meeting today, according to the Kremlin, and said that his army needs to “push and drive the enemy out of our territories” and ensure border security. Ukraine currently holds control of 28 settlements in Russia’s Kursk region, according to local authorities.

Ukrainian troops launched their surprise offensive on Aug. 6, crossing the border into the Kursk region before expanding the campaign to the neighboring Belgorod region.

It is Kyiv’s most significant incursion into Russian territory since Moscow’s full-scale invasion began in 2022, providing a significant morale boost to Ukraine and its Western allies — and concerns inside the Kremlin.

“Now it is clear why the Kyiv regime rejected our proposals for a peaceful settlement plan,” Putin complained at today’s meeting. “The enemy, with the help of its Western masters, is trying to improve its negotiating position in the future.”

LETTER TO ELON — The European Union’s digital enforcer wrote an open letter to tech mogul Elon Musk today ahead of a planned interview with former United States President Donald Trump to remind him of the EU’s rules on promoting hate speech. Trump announced last week that he is sitting down with Musk for a “major interview,” which will be livestreamed on X. Europe’s Digital Commissioner Thierry Breton reminded the world’s richest man of his legal obligation to stop the “amplification of harmful content.”

The EU in July charged X, which Musk bought in 2022, for failing to respect its social media laws. The platform faces multimillion euro fines.

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Nightly Number

$100 million

The amount of money that the principal Trump-aligned super PAC MAGA Inc. plans to spend on a TV ad blitz in the lead-up to Labor Day, a massive sum as Trump moves to regain his footing in the campaign.

RADAR SWEEP

THE VIRAL HUNT — When NBC began to roll out its plans for coverage of the 2024 Olympics, the network rolled out a bold strategy — sending “content creators” with millions of followers to Paris to document the Games in a new way. This attempt to secure younger audiences ended up being somewhat misplaced — what actually went viral online was largely videos and images of athletes and well-known entertainers like Snoop Dogg. The content creator flop has left executives and viewers reconsidering what makes a viral hit in 2024 and beyond — and could have significant implications for future programming decisions. Marah Eakin reports for WIRED.

Parting Image

On this date in 2008: Georgians carry a giant national flag while gathering for an anti-Russian demonstration in front of the Parliament building in Tbilisi. Russia ordered a halt to its military action in Georgia after five days of air and land attacks sending Georgia's army into headlong retreat and leaving towns and military objects destroyed.