For Immediate Release: December 1, 2025
Contact: Sean O’Leary
Charleston, WV – Over the summer, Congress passed the “One Big Beautiful Bill” (H.R. 1), which includes a temporary “no tax on tips” provision framed as helping low-wage workers, while the rest of the legislation provides huge, permanent tax cuts to the wealthy and makes the largest cuts to Medicaid and SNAP in history. In West Virginia, similar legislation to eliminate the state income tax on tips was introduced during the 2025 legislative session.
Out today, our new policy brief details how raising the minimum wage would provide a larger benefit to a higher number of low-wage workers in West Virginia than implementing no tax on tips.
A no tax on tips policy would leave out the vast majority of low-wage workers who do not receive tips, and those workers often already work for lower wages than their tipped peers. There were an estimated 4 million workers in tipped occupations in 2023, representing 2.5 percent of all employment nationwide. That is the equivalent of just 17,050 workers in West Virginia.
Further, ending taxation of tips would likely expand employer use of tipped labor and undercut efforts to raise worker compensation. It would encourage employers in more industries to reclassify wage income as tips, effectively shifting their employment costs onto consumers by encouraging tipping and then cutting wages equivalently. New tipped workers would see their incomes become less stable and predictable, while consumers would face higher costs via increased tip requests. No tax on tips lets employers off the hook from paying their workers a fair wage while creating inequity in the tax system.
Raising the minimum wage would provide a much larger benefit to a significantly higher number and broader range of low-wage workers. The Raise the Wage Act of 2025 would raise the minimum wage to $17 per hour by 2030 and gradually eliminate the tipped minimum wage. Raising the minimum wage to $17 per hour would benefit 186,000 low-wage workers in West Virginia—over 27 percent of the workforce and ten times as many workers who would benefit from no tax on tips.
It is important to note that it has been a decade since West Virginia’s last minimum wage increase, and since then, the minimum wage has lost a concerning 22 percent of its value to inflation. Today’s state minimum wage is at its lowest inflation-adjusted point since 2008 and has lost so much of its value that it is unable to keep workers and their families out of poverty.
Raising the minimum wage would create a significantly larger benefit for West Virginia low-wage workers than exempting tips from the income tax. No tax on tips would cost the state up to $5 million, or in other words, the state’s tipped workers would receive a tax cut worth a total of $5 million. Meanwhile, increasing the minimum wage to $17 per hour by 2030 would increase wages for low-wage workers by a total of $73.7 million. On average, West Virginia workers benefiting from an increase in the minimum wage would see a 15 percent increase in their annual wages.
“Raising the minimum wage would benefit a broad range of workers in West Virginia,” says WVCBP senior policy analyst and brief author, Sean O’Leary. “While the misconception exists that many minimum wage earners are simply teenagers with entry-level jobs, the reality is that most beneficiaries of an increase in the minimum wage are adults, with many supporting their families.”
By raising the minimum wage, West Virginia would help ensure there is a wage floor that provides for family well-being, something that no tax on tips falls far short of providing. If the state is sincerely committed to helping low-wage workers, the clear and simple solution is raising the minimum wage.
Read the full policy brief.
