The Senate unanimously approved the “No Tax on Tips Act,” led by Texas Senator Ted Cruz, with a 100–0 vote—“one of the clearest examples of bipartisan cooperation in recent years.” The legislation exempts tips from federal income taxation, aiming to help millions of Americans in restaurants, hotels, salons, and other service jobs who rely heavily on gratuities.

This bill also marks a win for former President Donald Trump, who promoted eliminating federal taxes on tips during his 2024 campaign, framing it as a way to directly aid working-class Americans. The Senate’s action brings that promise closer to reality.

Supporters emphasize the financial strain tipped workers face. Senator Cruz noted, “Many tipped employees live paycheck to paycheck and face higher effective tax pressures because their base wages are often too low to provide stability.” Taxing inconsistent tip income, he argued, creates an unfair burden on workers already struggling to make ends meet.

The measure appeals across party lines because it addresses a practical issue affecting households nationwide. Lawmakers recognize that reducing taxes on tips could have a direct impact on family budgets. Critics also argue that taxing voluntary customer-given income, rather than guaranteed wages, is outdated in today’s service economy.

The unanimous vote highlights that even in a polarized political climate, some economic issues can unite lawmakers. By targeting tip taxation, the legislation promises immediate and meaningful relief for millions of service workers across the country.

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