One of the keystones of former President Donald Trump’s 2024 campaign is the “No tax on tips” proposal, which involves eliminating taxation on tips received by, for example, wait staff, whose income primarily derives from gratuities. Senator Ted Cruz (R-TX) has even introduced a bill to codify this proposal.
The Tax Foundation, of course, has some thoughts.
Former President Donald Trump has proposed making all tip income tax-exempt. In the wake of this proposal, bills to exempt tip income have cropped up in both the House and Senate. Both the former president and the idea’s congressional advocates argue it will lower costs for working-class Americans. But it’s a poorly targeted change, with the potential for unintended consequences for both consumers and the federal budget.
The Senate bill, introduced by Sen. Ted Cruz (R-TX) and titled the “No Tax on Tips Act,” would create a…
