(NewsNation) — New York Gov. Kathy Hochul wants to eliminate state taxes on up to $25,000 of tipped income, her office announced Thursday.
Hochul plans to put forward a “no tax on tips” proposal in her New York Executive Budget proposal for fiscal 2027, intended to help workers in the service industry by boosting their take-home pay.
The move follows President Donald Trump’s implementation of the initiative in his “big beautiful bill” passed last year, which only applies to tipped income on the federal level.
Many states followed suit, but not New York, prompting heavy criticism from the White House.
“Disgraceful: ‘Gov. Kathy Hochul and Democratic New York lawmakers haven’t extended President Trump’s ‘no tax on tips’ policy to state income taxes — hitting bartenders and restaurant workers in the pocketbook all while preaching affordability,’” White House press secretary Karoline Leavitt wrote on X last week, linking to a New York Post story on Hochul not incorporating the proposal in New York.
‘Affordability remains my top priority’: Hochul
Hochul’s adoption of the initiative is part of a broader effort to make New York more affordable.
In a press release Thursday, Hochul called affordability her “top priority,” highlighting several measures intended to make New York a more affordable place to live in the new year.
“Starting today, tax rates for the vast majority of lower and middle-class New Yorkers will be cut, families with children will see a sweeping increase in the child tax credit, and minimum wage workers across the state will see their wages go up,” Hochul said.
Hochul up for re-election
Hochul’s affordability push comes as she’s up for reelection this November. Her opponent, Republican Nassau County Executive Bruce Blakeman, clinched Trump’s endorsement shortly after Rep. Elise Stefanik, R-N.Y., dropped out of the GOP primary in December.
Recent polling shows Republicans have an uphill climb ahead, particularly as Democrats are favored to have a good political environment in the upcoming midterm season.
A Siena Poll released in mid-December showed Hochul leading Blakeman by 25 points.
NewsNation partner The Hill contributed to this report.