In Vegas Where Tips Rule, Distrust Mounts Over Tax-Free Pitches

From the valets parking cars to the dealers at the blackjack tables to the bartenders at the city’s many bars, Las Vegas relies on people working for tips.

“Las Vegas was built on tips,” said James Reza, a city native who owns two high-end beauty salons in town.

Around 17% of workers in Nevada—the highest concentration in the country—make their living through tipped work, according to the Center for Business and Economic Research at the University of Nevada Las Vegas. Nationwide, tipped workers only account for about 2.5% of all workers, according to Yale’s Budget Lab.

To boost the incomes ...