On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBB) into law, making permanent the 2017 tax cuts and adding new benefits like tax-free overtime and an extra deduction for seniors.

The Congressional Budget Office warns OBBB could raise deficits by $3.4 trillion over the next decade. Supporters say it provides relief for millions, while critics argue it favors select groups and worsens debt.

A key feature is the No Tax on Tips Act, already passed by the Senate, which lets service workers deduct up to $25,000 in tips from taxable income. Tips must still be reported, but they would not be taxed. Wages and bonuses remain taxable, and the measure excludes automatic service fees and high earners in law, finance, and consulting.

Senator Ted Cruz said, “These workers are putting in long hours and living paycheck to paycheck. They deserve to keep more of what they earn.” Senator Jacky Rosen called them “the backbone of the economy.”

Supporters believe the law boosts take-home pay, eases small business burdens, and strengthens tourism economies.