“Senate Passes ‘No Tax on Tips’ Bill”
In a rare display of bipartisan unity, the U.S. Senate on Tuesday unanimously passed legislation to eliminate federal income taxes on tips, delivering a key campaign promise made by both President Donald Trump and his opponent, Vice President Kamala Harris. The measure now moves to the House of Representatives, where it is widely expected to pass.
The bill, originally introduced in January by Sens. Ted Cruz (R-TX) and Jacky Rosen (D-NV), seeks to provide immediate financial relief to millions of tipped workers in sectors such as food service, hospitality, and tourism. The legislation gained traction following campaign stops in Nevada last year, where both Trump and Harris announced their support for removing taxes on tips—an issue of particular relevance in a state heavily reliant on service industry labor.
Sen. Rosen, speaking after the vote, called the bill “great news for Nevada,” noting that many of her constituents rely on tips as a major part of their income. “This bill is not the be-all, end-all,” she said, “but it’s going to offer immediate financial relief while the Senate continues to work to lower costs and find other avenues of relief for hard-working families.”
Despite initial concerns that the bill might be stalled, especially given the polarized atmosphere in Washington, the unanimous vote signaled broad agreement on the issue. Senator Cruz praised the outcome, saying, “The certainty that we will see no tax on tips become the law of the land is very close to 100 percent. One way or another, no tax on tips is going to become law.”
The legislative push comes amid a broader conversation in Congress about cost-of-living pressures and wage stagnation, particularly for lower-income Americans. According to the U.S. Bureau of Labor Statistics, over 4.3 million workers rely on tips as part of their compensation. Many of these workers fall into lower tax brackets but still face burdens from reporting and paying taxes on variable and often under-reported income.
Critics of the current system argue that taxing tips creates disproportionate hardship for workers who already operate in precarious financial conditions, especially in high-cost cities or tourism-driven economies. Supporters of the bill contend that eliminating federal taxes on tips could inject billions of dollars directly into the pockets of service workers without requiring new federal spending.
The bill will now head to the House of Representatives, where lawmakers are considering two paths: passing it as a standalone measure or including it in a broader reconciliation package aimed at addressing inflation and middle-class financial stress.
Should the bill become law, it would mark one of the most significant federal tax reforms for working-class Americans in recent years, directly impacting millions of workers and fulfilling a rare point of agreement between the two major political parties.
Rewritten: Source article posted here: https://justthenews.com/government/congress/senate-unanimously-passes-bill-eliminating-federal-taxes-tips