Headline Roundup • May 21st, 2025
Senate Unanimously Approves Federal Tax Deduction for Cash Tip Incomes
Taxes,Donald Trump,US Senate,Politics,Bipartisanship,Federal State And Tribal Powers,Ron Paul,Economy And Jobs,Labor
Summary from the AllSides News Team
The Senate has unanimously passed a bill that would grant a federal tax deduction up to $25,000 a year on tips earned in cash.
The Details: The No Tax on Tips Act was brought by Sen. Jacky Rosen (D-NV) and will be limited to workers who earn less than $160,000 in 2025. This dollar figure will be adjusted for inflation in the coming years. The bill still has to be approved by the House before heading to President Trump’s desk for signing.
For Context: Eliminating taxes on tipped incomes was one of President Trump’s most notable promises made during his 2024 election campaign. He first made the promise in June at a campaign rally in Nevada – a state where over 25% of private sector workers work hospitality jobs. In 2007, Rep. Ron Paul (R-TX) sponsored a similar bill, though it did not receive a vote.
How The Media Covered It: Several outlets, like The Hill (Center bias), Just The News (Lean Right), Politico (Lean Left), Axios (Lean Left), and others wrote that the bill “eliminates” federal taxes on tips, though the bill does not state this. NBC News (Lean Left) was more careful with its framing, not mentioning the “elimination” of tips anywhere in its coverage and instead prominently noting the dollar threshold and cash stipulations of the bill. Track the status of Trump’s other campaign promises with AllSides here.
Written by the AllSides staff (of humans). Learn more. Support our mission. Suggest an improvement to this summary.
Featured Coverage of this Story
Tom Williams / CQ-Roll Call via Getty Images file
In a surprise move, the Republican-led Senate quickly passed the "No Tax on Tips Act" on Tuesday, giving its official stamp of approval to an idea that has gained traction since President Donald Trump campaigned on it last year.
The legislation would create a tax deduction worth up to $25,000 for tips, limited to cash tips that workers report to employers for withholding purposes on payroll taxes. The tax break would also be restricted to employees who earn $160,000 or less in 2025, an amount that will rise with inflation in coming...
The Senate on Tuesday passed a bill that would eliminate federal taxes on tips, advancing with the help of Democrats a top campaign promise of President Trump.
Sen. Jacky Rosen (D-Nev.) brought the bill to the floor with the expectation that it would be blocked, but Sen. Ted Cruz (R-Texas) declined to. It passed via unanimous consent (UC).
“I just want to say: This is great news for Nevada,” Rosen said after the bill was advanced, lauding the work of the millions of hospitality and service workers in her home...
The Senate on Tuesday unanimously approved legislation that eliminates federal taxes on tips, fulfilling one of President Donald Trump's campaign promises with bipartisan support.
Trump first proposed eliminating taxes on tips last June, which was later echoed by his opponent, former Vice President Kamala Harris, during her own presidential campaign in August. Both made the commitments during campaign stops in Nevada.
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