LAS VEGAS – President Donald Trump heads to Las Vegas on Thursday to promote the tax cuts he signed into law last year, aiming to underscore what Republicans perceive as an economic advantage as they approach this year’s elections.
While workers earning tips and overtime are experiencing larger tax returns this season, these savings are being significantly offset by rising gas prices, exacerbated by the ongoing conflict in Iran.
This visit to Las Vegas marks a rare trip for Trump to the West Coast, coinciding with increasing political pressure to conclude the war and shift focus to messages that could bolster his party’s chances of maintaining congressional control in the upcoming midterm elections.
On Friday, the president is scheduled to hold an event in Phoenix with the conservative group Turning Point USA. His first stop, however, is in Las Vegas, where he will participate in a roundtable discussion featuring police officers who have benefited from new tax breaks on overtime, as well as a barber and a casino pit supervisor who have claimed the new tax breaks on tips.
The Treasury Department reported that the average tax refund this year has exceeded $3,400, an increase of about $340 from the previous year.
Vegas Faces Economic Challenges
Once recognized for its affordable living, Las Vegas is now experiencing economic strain. Trump has stated that he first envisioned his “no tax on tips” initiative in Las Vegas, a city where the entertainment industry thrives and many workers rely on gratuities from visitors.
However, Las Vegas is also home to many commuters, including tipped workers who travel to their jobs at the city’s renowned casinos. Currently, gasoline prices are averaging $5 per gallon, marking a 28% increase compared to last year, according to AAA.
Nicholas Delaney, an airline attendant residing in the Las Vegas suburb of Henderson, expressed his discontent with the current administration, stating, “I think Trump is doing a terrible job when it comes to the cost of living.” Despite acknowledging the positive aspect of the tax break for tips, he voiced concerns regarding the rising costs of groceries and gas.
“I gotta spend over $100 for a full tank of gas, 13 gallons? Crazy,” Delaney lamented.
Conversely, Paula Goodman, a bartender at a Henderson casino who voted for Trump, shared her perspective, stating that she believes he is “doing a pretty good damn job” despite the high gas prices, which she attributes to market fluctuations. Goodman appreciates the tax savings on tips, emphasizing, “Every little penny nowadays is, like, huge.”
She added, “You’ve seen diesel, right? $6.11.”
Tax Refunds vs. Rising Gas Prices
The White House emphasizes that Trump’s administration remains focused on tax cuts, deregulation, and increasing U.S. energy production to alleviate prices, framing the high gas prices as a temporary consequence of the Iran conflict. White House spokesman Kush Desai highlighted that “tens of millions of Americans are benefiting this tax season from the president’s signature provisions” in the tax law, asserting that the administration has not lost sight of its affordability agenda.
Nonetheless, the ongoing conflict has diminished affordability for many. The Bank of America Institute analyzed its deposit and spending data, concluding that “the average increase in tax refunds could cover the average increase in gasoline spending for at least five months.”
Kathy Bostjancic, chief economist at Nationwide, stated that the steep rise in gasoline prices is likely to completely offset the increased tax refunds for households, suggesting that the refund money may merely prevent a more significant decline in consumer spending.
Trump’s messaging around the tax breaks has been overshadowed by various distractions, including public disagreements with the pope and controversial social media posts. GOP strategist Ron Bonjean remarked that there is growing frustration among Republicans regarding their ability to retain the House in the upcoming November elections.
“He absolutely has to talk about his plan to bring down high gasoline costs, or else he’s lost his own message,” Bonjean advised, emphasizing the need for Trump to acknowledge the economic realities faced by constituents.
Future Gas Prices
Although Trump has expressed optimism about a swift resolution to the conflict with Iran, a solid agreement remains elusive, with both nations holding divergent positions. In recent interviews, Trump suggested that gas prices might remain high or slightly increase by the November midterms but later revised his statement, predicting they would be “much lower” provided the war concludes.
Treasury Secretary Scott Bessent offered a more cautious outlook, indicating that gas prices might decline sometime this summer, contingent on the progress of negotiations with Iran. He expressed optimism that prices could return to $3 per gallon between late June and mid-September.
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This report was compiled with contributions from Associated Press writer Josh Boak in Washington.
