Story perspectives

New 'No Tax on Tips' Policy Sparks Controversy

9/4/2025

Summary

Story summary

The Treasury Department's preliminary list identifies 68 occupations eligible for the "No Tax on Tips" policy, including social media influencers and podcasters.
This policy aims to fulfill President Trump's promise to eliminate taxes on tips, offering a deduction of up to $25,000 from 2025 to 2028.
Critics claim the benefits may primarily favor higher-income earners, with only 3% of households expected to gain significantly.
The public can provide feedback on the proposed list, which will be published in the Federal Register.

History

Historical Context

The 1986 Tax Reform Act reshaped tax deductions, notably affecting the hospitality sector. By 2019, around 12 million food service workers relied on tips for income. In 2025, President Trump's policy allowed eligible workers to deduct up to $25,000 in tips, echoing past reforms aimed at aiding low-income earners, while critics warned it could increase the federal deficit by $40 billion by 2028.

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Story summary

The Treasury Department's preliminary list identifies 68 occupations eligible for the "No Tax on Tips" policy, including social media influencers and podcasters.
This policy aims to fulfill President Trump's promise to eliminate taxes on tips, offering a deduction of up to $25,000 from 2025 to 2028.
Critics claim the benefits may primarily favor higher-income earners, with only 3% of households expected to gain significantly.
The public can provide feedback on the proposed list, which will be published in the Federal Register.

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