In a rare and powerful moment of unity, the U.S. Senate voted 100–0 to pass the No Tax on Tips Act — a groundbreaking bill that could transform the lives of millions of American service workers. The legislation, championed by Senator Ted Cruz and first proposed by former President Donald Trump during his 2024 campaign, seeks to eliminate federal income taxes on all tips, whether earned in cash, by card, or through tip pools.
If signed into law, this would mark one of the most sweeping pro-worker tax reforms in recent memory, delivering long-awaited financial relief to those who keep America’s service economy running — from waiters and bartenders to delivery drivers, stylists, and hotel staff.
A Rare Moment of Bipartisan Agreement
In an era of political division, a 100–0 vote is almost unheard of. Lawmakers from both sides of the aisle agreed that it was time to recognize the challenges faced by America’s tipped workers, many of whom rely on gratuities to survive rising costs and unpredictable schedules. Senator Cruz called it “a game-changer for working Americans,” emphasizing that these workers deserve to keep what they earn through hard work and service.
What the Law Would Do
At its core, the bill allows service workers to exclude up to $25,000 in annual tips from their taxable income. That means a server earning $40,000 in wages and $20,000 in tips would only pay taxes on the $40,000 base pay — saving potentially thousands of dollars each year.
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