Back to today’s briefing

Story perspectives

Tax Bill Aims to Eliminate Income Tax on Tips

5/21/2025

40 9

Left

Republicans Propose Tax Cut

House Republicans' tax bill proposes eliminating federal income taxes on tips, a move that has garnered bipartisan support. This initiative, fulfilling a promise from President Trump, could provide low-income tipped workers with an average tax cut of $1,260. Surprisingly, the National Restaurant Association backs this policy, showcasing its widespread appeal despite their usual stance against wage hikes.

Right

Cruz Advocates Tax Relief

The U.S. Senate has approved the "No Tax on Tips Act," empowering tipped workers to deduct up to $25,000 in cash tips from their taxes. Spearheaded by Sen. Ted Cruz, this bill honors a commitment made by President Trump. It now heads to the House, with a projected cost of $110 billion over the next decade.

History

Historical Context

The proposed "No Tax on Tips Act" reflects ongoing debates about tax policy and economic inequality in the U.S. Since the 1980s, tax reforms have often favored wealthier individuals, exacerbating income disparities. The bipartisan support for this bill mirrors past efforts, like the 2017 tax cuts, which aimed to stimulate economic growth but raised concerns about fairness and long-term impacts on low-income workers.

1 of 3

Republicans Propose Tax Cut

House Republicans' tax bill proposes eliminating federal income taxes on tips, a move that has garnered bipartisan support. This initiative, fulfilling a promise from President Trump, could provide low-income tipped workers with an average tax cut of $1,260. Surprisingly, the National Restaurant Association backs this policy, showcasing its widespread appeal despite their usual stance against wage hikes.

1 / 3