Support and Purpose
Senator Cruz emphasized that taxing tips places an unfair burden on workers already struggling to make ends meet. “Many tipped employees live paycheck to paycheck,” he noted, “and removing federal taxes on tips would provide immediate and meaningful relief.”
The legislation also reflects promises made during former President Donald Trump’s 2024 campaign, which included eliminating federal income taxes on tips to support working-class Americans.
Bipartisan Backing
Supporters argue that taxing tips — voluntary income given by customers — is outdated and does not reflect the realities of the modern service economy. Lawmakers from both parties recognized that exempting tips from federal taxes could provide a direct, positive impact on household budgets, making it an issue that unites members across the aisle.
Looking Ahead
With Senate approval secured, the legislation now moves forward in the legislative process. Advocates hope that its passage will bring much-needed financial relief to service workers and set a precedent for policies that support families reliant on tipped income.