The 'no taxes on tips' policy, supported by both Kamala Harris and Donald Trump, proposes that workers earning under $160,000 can deduct $25,000 in tips annually from taxes. This applies to service workers, primarily in the restaurant sector. While the legislation has garnered bipartisan support with a unanimous Senate vote, experts caution that its economic benefits may be limited. The initiative, introduced by Sen. Ted Cruz, reflects a rare collaboration among lawmakers focused on alleviating tax burdens for service industry personnel.
This legislation allows workers earning under $160,000 to deduct $25,000 in tips annually, exempting them from taxes on their tipped income.
The 'no taxes on tips' policy is supported by both parties, reflecting a rare consensus on an issue that directly impacts service industry workers.
Despite its promise, experts warn that the economic benefits of 'no taxes on tips' may be minimal for workers in the service sector.
Senator Jacky Rosen highlighted bipartisan support when she emphasized, 'No taxes on tips' was one of President Trump's key promises to the American people.
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