CEO of McDonald: no tax on advice creates an “unequal playing field” for its restaurants

The boss of fast food told CNBC Squawk box On Tuesday, although it supports the policy of non-tax on tips, it does no favor for workers at the McDonald’s restaurant.

“The problem without advice is that he only took advantage of restaurants that have tips,” said Kempczinski. “We do not change in McDonald’s, and we do not get, essentially, this tax relief there.”

Trump included no tax on advice as part of the Big Beautiful Bill he signed in July. The legislation allows a deduction of federal tax up to $ 25,000 from declared advice. Fast food workers and counters – as well as aid, chefs and cooks, dishwashers and other food workers – are eligible for tax deduction, according to a White House social media.

While some have not praised tips to save workers up to thousands of dollars in federal income tax each year, others have raised concerns that are really able to benefit from the policy. The Yale Budget LAB noted that 37% of workers winning tips had income low enough to exempt them from paying federal income tax in 2022, which means that the tax deduction would not even be relevant.

“ Unequal playing field ” for restaurants

According to Kempczinski, policy has other negative consequences for restaurant workers. For restaurants allowing workers to win advice, the minimum wage requirement is $ 2.13, a level set in 1991. Meanwhile, the federal minimum wage of $ 7.25 was set in 2009.

By offering a reward for certain sloping workers, no tax on advice, offers a disproportionate advantage to companies that paid less workers while waiting for employees to make the majority of their wages in tips, Karla Dennis, tax strategist, previously says fortune.

“It is a victory for the owner of the company,” said Dennis. “They may have more of their employees who wish to occupy jobs that earn advice, and this can also help get more people in these services focused on services.”

KEMPCZINSKI said that policy therefore gives an additional advantage to companies with slope wage policies, which McDonald’s does not have.

“Right now, there is an uneven playground,” he said. “If you are a restaurant that allows advice or advice as part of your equation, you essentially ask the customer to pay your work, and you get an additional advantage without taxes on advice.”

Potential solutions to set the minimum wage

In order to alleviate this disparity, Kempczinski suggested setting a minimum wage for point and not at point. He also said that the company was “open to conversations on the elevation of the federal minimum wage”. McDonald’s increased his minimum wage in 2021 by approximately 10% due to a shortage of labor from the time of the pandemic, workers entry-level hours earning between $ 11 and 17 years and managers earning between $ 15 and $ 20.

Eight states currently have an equal salary for sloping workers and not at point. In states where slope wages are $ 2.13 an hour, the poverty rate for servers and barmans oscillates around 18.5%, according to the Economic Policy Institute, a thinking group on the left, citing data from the American census. For states with a minimum wage, the poverty rate is approximately 11.1%. For no at point workers, poverty levels are similar, it doesn’t matter if a state has a minimum diving wage. A 2014 report from the Cornell University of Industrial Relations and Labor School revealed to have a minimum wage for sloping workers and not at point has also lowered rolling rates and increased the morale of employees.

“There has already been a model that shows that the salary tilted can be the same as the federal minimum wage,” said Kempczinski. “We just need to do it, I think, in the 50 states.”

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