Trump Plan to Exempt Tips From Taxes Could Cost $250 Billion (1)

Donald Trump’s new proposal to exempt tips from taxation would add between $150 billion to $250 billion to the federal budget deficit over 10 years, a budget watchdog group forecast on Monday.

The cost estimate from the nonpartisan Committee for a Responsible Federal Budget suggests that the plan’s deficit impact would be comparable and potentially much larger than the $172 billion projected revenue loss from extending the 2017 tax cuts for small businesses and other so-called pass-through companies due to expire next year.

The tax exemption for tips is Trump’s latest effort to court younger ...