The US Senate has unanimously passed a bill proposing a tax deduction for tips up to $25,000, aimed mainly at employees in tipped occupations like waiters and beauty professionals. Sponsored by Sen. Ted Cruz, the legislation would also provide business tax credits for payroll taxes on tips. Notably, employees earning over $160,000 in the prior year are ineligible. With an estimate of 4 million tipped workers in 2023, the proposal could cost up to $110 billion in federal revenues over the next decade, as it reflects a broader Republican effort for tax reforms.
This new bill... would cost $110 billion in federal revenues over 10 years, according to estimates by the center-right Peter G. Peterson Foundation.
The Budget Lab at Yale estimates there will be approximately 4 million workers in tipped occupations in 2023.
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