North Carolina bill proposes income tax deduction for tips and bonus pay

NORTH CAROLINA — A new bill in North Carolina aims to provide an income tax deduction for tips and bonus pay, potentially benefiting many workers in the food industry.

House Bill 11 proposes an income tax deduction for up to $2,500 of bonus pay and tips, offering relief to workers who rely heavily on tips for their income.

The bill has bipartisan support and has been sent to the House Finance Committee for further consideration.

Sophia, a barista at Giddy Goat Coffee Shop, supports the bill, stating that while it sounds attractive, she is concerned about the broader budgetary implications.

Jon Rosenberg, area director for Supperland, also supports the bill, noting that it could help attract more workers to the restaurant industry.

The Economic Policy Institute opposes the bill, arguing that it will help very few workers and could undermine pay increases for many more.

Sophia, who has been a barista at Giddy Goat Coffee Shop for about 10 months, relies on tips for her income.

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She expressed that tips provide less predictability and stability, as earnings can vary significantly from week to week. Jon Rosenberg, representing Supperland, a high-end eatery, believes that offering more money through tax cuts could expand the pool of potential hires.

However, he is uncertain about how the bill will impact his business, as Supperland already pays a living wage.

The Economic Policy Institute, a nonprofit think tank, has voiced concerns that the bill could expand the use of tipped work and undermine efforts to increase pay for workers.

They argue that the tax cut will benefit only a small number of workers. Sophia also raised concerns about the potential impact on the state budget, questioning whether the tax reductions might lead to tax increases elsewhere.

As the bill moves forward in the legislative process, it remains to be seen how it will impact workers and businesses in North Carolina. The proposal has sparked a debate about the benefits and drawbacks of tax deductions on tips.

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