LAS VEGAS – A Democratic congressman’s latest bill suggests that the hottest bets in Sin City aren’t at the gaming tables, but in the halls of Capitol Hill.

One expert said the tax-free payout could reach a five-figure amount for some workers.

Democratic Rep. Steven Horsford of Nevada said Tuesday he would introduce a bill to raise the federal minimum wage for all workers – including those who rely on tips for services – to $12 an hour and eliminate those tips from income taxes.

He plans to introduce the so-called “TIPS Act” later this month.

Horsford, whose northern Las Vegas neighborhood is home to many tipped employees at the city’s resorts, restaurants and casinos, made the proposal less than 72 hours after Vice President Kamala Harris said she would not support a “tax on tips,” an idea first floated by former President Donald Trump at a June 9 rally in Las Vegas.

In November, the four-term incumbent will face former North Las Vegas Mayor John Lee, who switched from Democrats to Republicans and previously supported Horsford.

Lee’s campaign website makes no mention of the issue of tax on tips.

Eliminating the income tax on tips – a move supported by Culinary Union Local 226, which is supporting both Horsford and Harris in their elections – would provide an unexpected windfall for many tipped workers, a tax agency said.

According to Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, tipped workers could receive an average of $20,000 to $30,000 in tax-free income annually if Horsford’s bill becomes law.

Another $1,500 or so could be refunded to workers if those tips were exempt from Social Security and Medicare taxes, he said.

Horsford, chairman of the Congressional Black Caucus, said his bill would end the “subminimum wage,” which is as low as $2.13 an hour in many states.

The difference between this payment and the current federal hourly minimum wage of $7.25 is to be made up through tips. If tip income does not cover the difference, the employer must pay the difference.

Horsford says the extremely low minimum wage for tipped workers – which is legal in 43 states but banned in Nevada and six others – “is really a relic of post-slavery America, whose goal was to explode the exploitation of newly freed slaves by not having to pay them a living wage.”

In a Zoom call, he told reporters: “Nearly 6 million American workers, or nearly 6% of the working population, rely on tips for the majority of their income.”

Of those six million, “an astonishing 70 percent are women, often single mothers and women of color,” he continued.

The TIPS Act still needs to be worked out, the spokesman acknowledged. When asked about the tax provisions for Social Security and Medicare, Horsford said: “I am working with a tax advisor on this matter.”

He added that “guardrails” would need to be included in the measure to ensure that people in other occupations do not reclassify normal wages as tips.

On the ground, those who would most benefit from this measure are cautious about the impact on their checkbooks.

Seven members of the Culinary Union who met last week to discuss the issue before the bill was announced refused to put a dollar figure on the potential benefits.

One waitress, Tara Koroni, said that by reducing the tip tax, “I could pay the interest on my student loan.”

A tax expert says the country could get into trouble by removing tips from the tax base.

Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute in Washington, told the Washington Post that he wondered “why a waiter should have tax-free income when someone else who does hard work for a low wage … has to pay taxes on his earnings.”

He said workers who receive tips and do not currently earn enough to pay federal taxes could lose eligibility for the Earned Income Tax Credit and the Child Tax Credit.

When asked about these benefits, Horsford said, “We need to look” at how tip income could be reported for these credits but not taxed.