Ron Paul’s Vegas pitch: No taxes on tips

At a news conference where supporters out-numbered reporters 10 to 1, Rep. Ron Paul reiterated his plan to stop federal taxation of tips, a proposal that brought loud cheers in this tourism-dependent state, where nearly 20% of all workers rely on such income.

Speaking from a podium in an opulent Four Seasons Hotel ballroom, Paul said that Las Vegas “is a city that could benefit rather quickly from one little proposal: Make sure that the United States government does not tax tips at all.”

The result, he said, would be less paperwork for businessmen and service providers, many of whom are “working on the margin,” especially if they are reliant on such jobs for full-time employment. But even tip-reliant part-timers would benefit, he said, in a lengthy explanation that connected many of the ills he sees in the economy today.

The tip-earner, he said, “might be a student. Here we are, we have students struggling, they want to pay their way through college, and we want to encourage them. So we tax their tips, and then they come up short, and then we say, ‘Oh, what we need to do is give you a loan and put you further into debt.’ It makes no sense!”

Paul was asked whether it might be more economically sound just to raise the minimum wage – an idea that he bristled at as reducing the liberty that Americans crave.

“I don’t like that idea at all,” he responded bluntly. “I don’t like to use force, and that’s what you’re doing. You’re forcing a contract. The government is supposed to protect contracts, not dictate the contract. If they can manipulate the minimum wage laws, they can manipulate the maximum wage laws.”

Paul unveiled the cornerstone of his economic plan in Las Vegas last October, proposing a one-year, trillion-dollar cut in federal spending that he said would allow him to balance the budget in his first term as president.

He said he would permit workers to dip into their 401(K) retirement accounts without penalty to start or invest in new businesses. He would reduce corporate and capital gains taxes and repeal what Republicans refer to as “Obamacare.”

On Wednesday, he highlighted the elements of his economic plan that would most directly affect residents of Nevada. The Silver State has the highest unemployment rate of any state in the country, and newspapers regularly blare dire pronouncements about the moribund real estate market, like the Reno Gazette-Journal’s recent headline: “Nevada leads US in foreclosure rate for fifth straight year.”

Paul largely ignored his opponents in the race for the Republican presidential nomination and actually defended former Massachusetts Gov. Mitt Romney.

He was asked to comment on the uproar over Romney’s comment to CNN that “I’m in this race because I care about Americans. I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it....” And he was also asked what the federal government’s responsibility to the poor is.

What the government should do to those with the very least, he said, is “maximize freedom, because that’s where you get maximum production.”

And he said that he hadn’t heard the full comment by Romney.

“Sometimes we as politicians get taken out of context,” he said. “Quite frankly, he is my political opponent, and we don’t agree on a whole lot. But I also think not too long ago he was taken out of context that he liked to fire people, which was completely out of context. So until I look at that, I give him the benefit of the doubt.”

On Thursday, Paul travels to Elko and Reno.