Republican gubernatorial candidate Tom Emmer is now talking taxes after talking tips got him in trouble.
A day before he was to hold a town hall with servers at a Roseville restaurant, Emmer on Tuesday proposed that waiters and waitresses be allowed to keep the first $20,000 of their tips tax-free. The average income for servers in Minnesota is $19,000.
"They should not have to report their tips," Emmer said. "Tips should not be taxed. That's my belief."
The idea would cost the state about $17 million, the Emmer campaign estimates. State revenue officials said they were unable to calculate the cost of such a proposal because they do not track tips and wages separately.
Emmer's proposal comes after more than a week of criticism for his earlier support of a "tip credit." Such credits allow employers to pay servers less than the minimum wage, on the assumption that their tips would make up the difference. At the time, Emmer also said some restaurant servers earn $100,000 a year, touching off a firestorm among waiters and waitresses.
On Tuesday afternoon, DFL gubernatorial endorsee Margaret Anderson Kelliher held a news conference showcasing some disgruntled servers.
"I've got news for Tom Emmer," waitress Lissi Corbett said at the news conference. "I'm not overpaid and I don't make $100,000 a year. ... I'm not here to speak negatively about Tom Emmer, but I will say this -- I wouldn't vote for him if he gave me a $100,000 tip."
Kelliher, who last week advocated increasing the minimum wage, said Emmer's new proposal is nothing more than "Tom Emmer taking tips from his consultants to try to get out of this situation. ... I'm sure he's just going round and round and round on this."
Both Kelliher and DFL candidate Matt Entenza's campaign said Emmer's smack at the minimum wage is part of a pattern. Both highlighted his failed 2005 move to repeal the minimum wage entirely.
There is no indication that Emmer, a House member from Delano, ever backed the tax exemption for tips during his five years at the Legislature. But the idea is not unknown. Montana allows food, lodging and beverage workers to keep their tips tax-free and U.S. Rep. Ron Paul, a Texas Republican who ran for president in 2008, has made a similar proposal at the federal level.
Emmer said that for servers making $20,000, the exemption would reduce taxes by about $500. Those earning $30,000 would see a tax drop of $800. Emmer estimated the proposal would affect about 45,000 Minnesota servers. His proposal also would eliminate the tax penalty for restaurants that provide free meals to their employees.
Emmer's spokesman, Bill Walsh, said Emmer's proposal extends only to hospitality workers because they have been particularly hard hit during the recession.
Emmer's campaign now says Emmer backs a tip credit that would freeze servers' minimum wage even if the minimum wage rose for other workers.
Emmer has also backed away from his earlier statement about $100,000 servers.
"He's going to say, 'I get that 98 percent of you are not making anywhere near $100,000 a year,'" Walsh said. "The $100,000 is the extreme and maybe it's a hyperbole and maybe it's a bad example."
Emmer's town hall, to which he's invited all servers, regardless of party, will be at Roseville's Ol' Mexico restaurant.
The "restaurante and cantina" has received a lot of attention of late. Over the weekend, Emmer shadowed a waitress there as she served tables for a few hours and put up a You-Tube video on his brief server stint.
"One thing I learned from this experience is that tips should be between the customer and the server, and state government has no business reaching in and taking a portion of that income," Emmer said in a fundraising e-mail on Tuesday.
Rachel E. Stassen-Berger • 651-292-0164
