U.S. Sen. Ted Cruz has introduced legislation to support the Trump administration’s campaign proposal to eliminate the federal income tax on cash tips.
The “No Tax on Tips Act” would exempt tips—including cash, credit and debit card charges, and checks—from the federal income tax by allowing qualified taxpayers to claim a 100 percent deduction when filing their tipped wages.
The maximum deduction that can be made by an individual per taxable year is $25,000.
Additionally, the legislation states that no later than 90 days after it is enacted, the secretary of the Treasury Department must publish a list of occupations that traditionally and customarily received tips on or before December 31, 2023.
Only workers in occupations on the Treasury Department list would qualify for the exemption. Ostensibly, this could eliminate professions where workers are tipped for illict acts or lewd content.
“American workers in many industries rely on tipped wages to make ends meet,” said Cruz. “Today, I’m introducing my bipartisan No Tax on Tips Act—legislation I authored to fulfill President Trump’s promise to end the wrongful practice of taxing voluntary tips. I’ve long believed the GOP should be the party of bartenders, of waiters and waitresses, and this bill is an important step to ensure we are addressing the economic needs of working Americans.”
“This pro-worker bill will deliver relief to families facing rising costs caused by the Biden administration’s inflationary policies,” he continued.
Republican Sen. Rick Scott from Florida joined Cruz in introducing the bill, saying it’s time to take significant action to cut taxes.
“During my time as Governor of Florida, I worked to cut taxes over 100 times to help businesses thrive, families keep more of their hard-earned dollars and turn our entire economy around,” said Scott. “After four years of President Biden’s skyrocketing inflation making life harder for families, it’s about time we follow Florida’s turnaround playbook and take significant action to cut taxes with the No Tax on Tips Act. President Trump is laser-focused on getting our economy back on track, and passing this bill ASAP will be a great start.”
On Saturday, President Donald Trump held a rally in Las Vegas, promising to work with Congress to get the measure on his desk.
“In the coming weeks, I’ll be working with Congress to get a bill on my desk that cuts taxes for workers, families, small businesses, and very importantly, keeps my promise,” said Trump. “We’re gonna get it for you — no tax on tips.”
Cruz pushed similar legislation last summer.
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