This story was originally published on Judd Legum’s Substack, Popular Information, to which you can subscribe here.

Billionaire Elon Musk has pledged to give $45 million a month to a Super PAC that’s encouraging swing-state supporters of former President Donald Trump to vote absentee, a practice Musk has publicly described as “insane,” “too risky,” and a recipe for “large-scale fraud.” 

Trump has advanced a variety of wild conspiracy theories to falsely claim that he won the 2020 presidential election. One of his favorites is the false claim that supporters of President Joe Biden had stuffed dropboxes with falsified absentee ballots. Right-wing polemicist Dinesh D’Souza created a 90-minute documentary, 2000 Mules, devoted to the baseless allegation about absentee ballots. D’Souza’s documentary was so shoddy that its distributor, Salem Media Group, ultimately pulled the film from the market and issued an apology. 

Numerous studies have found that voting by mail is “safe and secure.” A database maintained by the right-wing Heritage Foundation, which supports restrictions on mail-in voting, reported “1,200 cases of vote fraud of all forms” from 2000 to 2020. Of those cases, “204 involved the fraudulent use of absentee ballots.” This amounts to “one case [of fraud using mail-in ballots] per state every six or seven years,” or “about 0.00006 percent of total votes cast.” 

Nevertheless, for months, Musk has used X to spread misinformation about absentee ballots to his nearly 190 million followers. Here’s a sampling:

On January 8, Musk wrote that it was “insane” that you can “mail in your ballot” in the United States. The same day, he said the government should require “in-person voting” on a single day, with few exceptions, “like other countries do.” 

On February 2, Musk asserted that the Biden campaign was involved in a scheme to submit a massive number of fake absentee ballots. 

On February 5, Musk said that absentee ballots are used for widespread fraud because the nature of absentee ballots made “fraud traceability impossible.”  

On May 9, Musk falsely claimed that “widespread voting by mail” was “not allowed before the scamdemic” and now “proving fraud [is] almost impossible.”

On July 9, Musk said that we “should mandate paper ballots and in-person voting only” because “anything mailed in is too risky.” In another post the same day, Musk said that “[m]ail-in and drop box ballots should not be allowed” because they facilitate “large-scale fraud.”

Musk’s X account has become the social media equivalent of 2000 Mules, grasping to justify Trump’s lies about the last presidential election. Musk’s diatribes against absentee voting have occurred as Trump and Musk are reportedly “developing a friendly rapport and talk on the phone several times a month as the election nears.”

A recent FEC decision means that America PAC, which is focusing on canvassing to increase absentee voting in swing states, can coordinate directly with the Trump campaign.

As a result, it’s not entirely surprising that, on Tuesday, Bloomberg reported that Musk would be donating $45 million a month to a Super PAC supporting Trump’s campaign. (Musk previously pledged not to donate to Trump or Biden.) The contributions to America PAC, which was formed in May, would make Musk the biggest financial backer of Trump in 2024 and one of the largest political donors of all time. 

How will America PAC spend Musk’s money? According to the Wall Street Journal, it will focus on “persuading constituents to vote early and request mail-in ballots in swing states.” Already, America PAC has hired hundreds of workers who are “having conversations with constituents in swing states and urging voters to request mail-in ballots.” 

The America PAC website encourages Trump supporters to “vote early in person or by mail.” It includes a link for voters to request an absentee ballot. So, on the one hand, Musk is telling millions of people that absentee ballots are “insane” and a vehicle for “large-scale fraud.” On the other hand, he may spend up to $180 million, by some estimates, to encourage more Trump supporters to vote absentee. 

Musk’s large donations to America PAC will position it to aggressively exploit a new loophole in federal campaign finance law. A Super PAC can raise and spend unlimited amounts of money to support (or oppose) a federal candidate. But, as a general rule, it cannot coordinate directly with a candidate’s campaign. Earlier this year, however, the Federal Election Commission (FEC) created a significant exception. 

In a March 20 advisory opinion, the FEC decided that “canvassing literature and scripts are not public communications, and as a result are not coordinated communications under Commission regulations.” That means that America PAC, which is focusing on canvassing to increase absentee voting in swing states, can coordinate its messaging directly with the Trump campaign. 

The FEC made this determination based on the idea that canvassing is “a traditional grassroots activity fundamentally different” from mass mailings or television advertisements. Now this loophole will allow the Trump campaign to effectively control messaging backed by hundreds of millions of donations from Musk and a few other very wealthy people. 

The FEC is composed of three Republican and three Democratic commissioners. For years, that has deadlocked the FEC, preventing it from issuing any significant rules or opinions. That has changed in recent months as Commissioner Dara Lindenbaum, a Democrat appointed by President Biden in 2022, has repeatedly sided with the three Republican commissioners to weaken campaign finance regulations. 

This story was originally published on Judd Legum’s Substack, Popular Information, to which you can subscribe here.

As president, Donald Trump’s tax policy heavily favored corporations and the wealthy. Trump’s signature tax legislation, the Tax Cuts and Jobs Act, overwhelmingly benefited those groups. 

But as a presidential candidate, Trump campaigns as a populist. In his 2024 campaign, he’s touting a proposal to end federal taxation on tips. He made the announcement last month in Nevada, a key battleground state with a large service industry that relies on tips. 

“For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips,” Trump said. “We’re going to do that right away first thing in office because it’s been a point of contention for years and years and years, and you do a great job of service.” 

This week, Trump’s proposal to end taxes on tips was one of 20 “promises” included in the official 2024 Republican Party platform: “LARGE TAX CUTS FOR WORKERS, AND NO TAX ON TIPS!”

Trump’s plan to end taxes on tips may help him politically with service industry workers. His campaign is urging people to write “Vote for Trump for NO TAX ON TIPS!” on their restaurant receipts.

Republicans in Congress have already introduced legislation to implement Trump’s plan and end federal taxation of tips. Notably, the bill would only exempt tips from income taxes, and not payroll taxes, which represents the majority of federal taxes owed by low-income workers. 

Only the best-paid workers would benefit, but why should a waiter who earns $60,000 a year pay less taxes than someone making the same amount in a grocery store?

But the proposal, if it were ever implemented, could have a detrimental effect on most tipped workers. The primary beneficiaries would be people who own and operate hotels, restaurants, and other businesses that employ tipped workers—in other words, people like Trump. 

First, many people who rely on tips earn so little money that they already pay no federal income taxes. For example, half of all servers earn $32,000 or less. A server with a family who earns $32,000 does not owe any federal income tax and, therefore, would not benefit at all from Trump’s proposal. 

The bigger issue is that the federal minimum wage for tipped workers is $2.13 an hour. The tipped minimum wage has not increased since 1991. Combined with tips, these workers are supposed to earn a minimum of $7.25 an hour. That is not close to a living wage in the United States in 2024. 

As a result, seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have eliminated the tipped minimum wage and require all employers to pay their employees the same minimum wage regardless of whether they receive tips. The Biden Administration requires “federal contractors to pay tipped workers the same minimum wages as others.” Major cities like New York and Chicago have recently implemented similar policies. Numerous other cities and states are considering following suit. 

The hotel and restaurant industry has been desperate to halt the momentum of state initiatives to raise the minimum wage. The National Restaurant Association, which represents restaurant owners, has endorsed Trump’s proposal. 

Historically, “many restaurants and rail operators embraced tipping because it allowed them to ‘hire’ newly freed slaves without having to pay them.”

Eliminating taxation on tips could sap support from efforts both to eliminate the tipped minimum wage and raise the minimum wage overall. While most service industry workers would receive little or no benefit from eliminating income taxes on tips, many would benefit from increasing their minimum wage to $15 an hour or higher. The Tax Policy Center notes that this tradeoff would be particularly brutal for “‘back of the house’ staff such as dishwashers, who often receive only a small share of tips, enough to qualify as tipped workers but not enough to live on, or to pay taxes.”

That’s why the Restaurant Workers United, a labor union that represents many of the industry’s workers, opposes Trump’s plan. “The call to end taxes on tips is just a misguided way of trying to fix a problem of uplifting the lower class,” Elyanna Calle, a bartender and RWU organizer in Austin, said. Saru Jayaraman, president of the labor advocacy group One Fair Wage, calls Trump’s proposal “not just the wrong solution, but a fake solution.”

There are some tipped employees—including the 10 percent of servers that earn $60,000 or more—who would significantly benefit from ending income taxes on tips. But why should these higher-paid tipped workers get a special tax benefit while those making the same income in industries without tips are excluded? Why should a waiter who earns $60,000 a year pay less taxes than someone making the same amount in a warehouse or a grocery store? 

There is no clear answer to these questions, other than the proposal to end taxes on tips may have political benefits for Trump.

Ending federal taxation of tips could prompt more industries to shift from paying wages to soliciting tips. In addition to potential tax benefits for employees, it would transfer some of the responsibility for paying workers from the business to its customers. For example, the Wall Street Journal notes that “[a]n auto-body shop could restrain its prices and wages and strongly encourage tipping as a way to get untaxed income to workers.”

If there is a significant shift to tipping over wages, it would also increase the cost of the proposal. The Committee for a Responsible Federal Budget estimates that incentivizing more tipping by ending federal taxation could cost the federal government up to $500 billion over 10 years.

According to the Leadership Conference on Civil and Human Rights, “tipping in the United States is rooted in a racist system which was designed to keep African Americans in an economically and socially subordinate position following the end of slavery.”

Prior to the Civil War, notes a conference fact sheet, “tipping was frowned upon: it was viewed by many as an aristocratic, European practice that was incompatible with American democracy.” But after the elimination of slavery, “many restaurants and rail operators embraced tipping because it allowed them to ‘hire’ newly freed slaves without having to pay them—they would be forced to work for tips alone.” The practice was designed “to keep African Americans in an economically and socially subordinate position.” 

Even today, it continues, “40 percent of people who work for tips are people of color.” Further, studies show that “customers discriminate against African-American servers, consistently tipping them less than White servers regardless of the quality of service.”

The movement to end the tipped minimum wage to create a single fair wage for all workers is about recognizing the dignity and worth of all workers. Trump’s proposal would push the United States in the opposite direction, making millions of Americans even more dependent on wealthy patrons. 

This story was originally published on Judd Legum’s Substack, Popular Information, to which you can subscribe here.

As president, Donald Trump’s tax policy heavily favored corporations and the wealthy. Trump’s signature tax legislation, the Tax Cuts and Jobs Act, overwhelmingly benefited those groups. 

But as a presidential candidate, Trump campaigns as a populist. In his 2024 campaign, he’s touting a proposal to end federal taxation on tips. He made the announcement last month in Nevada, a key battleground state with a large service industry that relies on tips. 

“For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips,” Trump said. “We’re going to do that right away first thing in office because it’s been a point of contention for years and years and years, and you do a great job of service.” 

This week, Trump’s proposal to end taxes on tips was one of 20 “promises” included in the official 2024 Republican Party platform: “LARGE TAX CUTS FOR WORKERS, AND NO TAX ON TIPS!”

Trump’s plan to end taxes on tips may help him politically with service industry workers. His campaign is urging people to write “Vote for Trump for NO TAX ON TIPS!” on their restaurant receipts.

Republicans in Congress have already introduced legislation to implement Trump’s plan and end federal taxation of tips. Notably, the bill would only exempt tips from income taxes, and not payroll taxes, which represents the majority of federal taxes owed by low-income workers. 

Only the best-paid workers would benefit, but why should a waiter who earns $60,000 a year pay less taxes than someone making the same amount in a grocery store?

But the proposal, if it were ever implemented, could have a detrimental effect on most tipped workers. The primary beneficiaries would be people who own and operate hotels, restaurants, and other businesses that employ tipped workers—in other words, people like Trump. 

First, many people who rely on tips earn so little money that they already pay no federal income taxes. For example, half of all servers earn $32,000 or less. A server with a family who earns $32,000 does not owe any federal income tax and, therefore, would not benefit at all from Trump’s proposal. 

The bigger issue is that the federal minimum wage for tipped workers is $2.13 an hour. The tipped minimum wage has not increased since 1991. Combined with tips, these workers are supposed to earn a minimum of $7.25 an hour. That is not close to a living wage in the United States in 2024. 

As a result, seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have eliminated the tipped minimum wage and require all employers to pay their employees the same minimum wage regardless of whether they receive tips. The Biden Administration requires “federal contractors to pay tipped workers the same minimum wages as others.” Major cities like New York and Chicago have recently implemented similar policies. Numerous other cities and states are considering following suit. 

The hotel and restaurant industry has been desperate to halt the momentum of state initiatives to raise the minimum wage. The National Restaurant Association, which represents restaurant owners, has endorsed Trump’s proposal. 

Historically, “many restaurants and rail operators embraced tipping because it allowed them to ‘hire’ newly freed slaves without having to pay them.”

Eliminating taxation on tips could sap support from efforts both to eliminate the tipped minimum wage and raise the minimum wage overall. While most service industry workers would receive little or no benefit from eliminating income taxes on tips, many would benefit from increasing their minimum wage to $15 an hour or higher. The Tax Policy Center notes that this tradeoff would be particularly brutal for “‘back of the house’ staff such as dishwashers, who often receive only a small share of tips, enough to qualify as tipped workers but not enough to live on, or to pay taxes.”

That’s why the Restaurant Workers United, a labor union that represents many of the industry’s workers, opposes Trump’s plan. “The call to end taxes on tips is just a misguided way of trying to fix a problem of uplifting the lower class,” Elyanna Calle, a bartender and RWU organizer in Austin, said. Saru Jayaraman, president of the labor advocacy group One Fair Wage, calls Trump’s proposal “not just the wrong solution, but a fake solution.”

There are some tipped employees—including the 10 percent of servers that earn $60,000 or more—who would significantly benefit from ending income taxes on tips. But why should these higher-paid tipped workers get a special tax benefit while those making the same income in industries without tips are excluded? Why should a waiter who earns $60,000 a year pay less taxes than someone making the same amount in a warehouse or a grocery store? 

There is no clear answer to these questions, other than the proposal to end taxes on tips may have political benefits for Trump.

Ending federal taxation of tips could prompt more industries to shift from paying wages to soliciting tips. In addition to potential tax benefits for employees, it would transfer some of the responsibility for paying workers from the business to its customers. For example, the Wall Street Journal notes that “[a]n auto-body shop could restrain its prices and wages and strongly encourage tipping as a way to get untaxed income to workers.”

If there is a significant shift to tipping over wages, it would also increase the cost of the proposal. The Committee for a Responsible Federal Budget estimates that incentivizing more tipping by ending federal taxation could cost the federal government up to $500 billion over 10 years.

According to the Leadership Conference on Civil and Human Rights, “tipping in the United States is rooted in a racist system which was designed to keep African Americans in an economically and socially subordinate position following the end of slavery.”

Prior to the Civil War, notes a conference fact sheet, “tipping was frowned upon: it was viewed by many as an aristocratic, European practice that was incompatible with American democracy.” But after the elimination of slavery, “many restaurants and rail operators embraced tipping because it allowed them to ‘hire’ newly freed slaves without having to pay them—they would be forced to work for tips alone.” The practice was designed “to keep African Americans in an economically and socially subordinate position.” 

Even today, it continues, “40 percent of people who work for tips are people of color.” Further, studies show that “customers discriminate against African-American servers, consistently tipping them less than White servers regardless of the quality of service.”

The movement to end the tipped minimum wage to create a single fair wage for all workers is about recognizing the dignity and worth of all workers. Trump’s proposal would push the United States in the opposite direction, making millions of Americans even more dependent on wealthy patrons.