In its explainer on President Donald Trump’s “no taxes on tips” provision in his “One Big, Beautiful Bill,” NPR used the subhead: “A political promise kept.”
Except it wasn’t.
Trump’s idea was politically potent. As I’ve argued, people are struggling with the cost of living and are receptive to ideas that provide immediate relief. And Trump found a way to tap into that anxiety, promising millions of tipped workers a direct, tangible break.
“For those hotel workers and people that get tips, you’re going to be very happy,” Trump said at a rally in battleground Nevada. “Because when I get to office, we are going to not charge taxes on tips. … We’re going to do that right away, first thing in office, because it’s been a point of contention for years and years and years, and you do a great job of service.”
No taxes on tips—period. That was the unambiguous promise. Trump repeated it endlessly. It was such a clean, compelling idea that Kamala Harris tried to co-opt it in her presidential run, drawing mockery from Trump and his allies.
But what was actually delivered? Something very different.
“Once the provision goes into effect, workers will be able to deduct $25,000 in tips annually from their taxable income,” NPR reported. “After that, tips will be federally taxed.”
That distinction matters. Workers will still be taxed on tips. The only change is that, come tax time, they’ll be able to deduct up to $25,000 in tips from their income—assuming they make less than $150,000 overall. For someone who qualifies for the full deduction and makes enough to land in the 22-24% tax bracket, the savings might land somewhere between $5,000 and $6,000.
That’s not nothing. But it’s a far cry from what was promised.
Here’s why the reality falls short:
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The promise was no taxes on tips. Even under the best-case scenario, workers still pay taxes on their tips. Just … less.
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The cap is low. So $25,000 in tips breaks down to roughly $2,000/month or $90 per workday. That might be generous in a rural diner, but in urban fine dining or nightlife hubs, it doesn’t go far. Even in Las Vegas—where Trump made the promise—the average server brings in $110 in daily tips. So even they won’t get the full benefit.
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You have to itemize deductions. Only about 10% of all taxpayers itemize deductions, because the standard deduction is easier and more beneficial for the vast majority. The Wall Street Journal estimates that roughly one-third of tipped workers won’t make enough to benefit at all. Even those who could benefit may not realize it—or stick with the standard deduction out of habit or confusion.
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It’s invisible. Republicans pulled a classic Democratic blunder—hiding benefits in the tax code. Trump promised something workers would feel in their paychecks. But those paychecks will still be docked for payroll, Social Security, Medicare, and state taxes. Nothing will look different. The sense of financial pressure won’t ease.
“It would be extra money,” Yolanda Garcia, a barista at Resorts World Las Vegas who makes around $100-150 a week in tips, told the WSJ. “It would help me buy more groceries, even a gallon of gas.”
Except it won’t—not right away. Not weekly. Not monthly. Because she’s still getting taxed the same. That benefit won’t show up until tax season—if she even knows how to claim it.
Democrats should take this idea and do it right. Promise tipped workers what Trump couldn’t deliver—no taxes on tips, for real. Make it simple, visible, and immediate—something they can actually feel in their paychecks, not buried in tax forms.
Indeed, going forward, every policy aimed at working people should focus on tangible, direct relief they notice right away. And if a good idea originated with Trump? Take it. Own it. Just be the ones who actually deliver.