House GOP Advances No-Tax-On-Tips Policy Fulfilling Trump Campaign Promise

House Republicans have advanced a major tax and budget reconciliation package that includes a provision to end federal taxation on tips through the end of President Donald Trump's term, fulfilling a key campaign promise of his. This measure, supported by some Democrats in Nevada and endorsed by the Culinary Workers Union, would temporarily exempt qualified tips from income tax but is set to expire in 2028. While proponents argue it allows tipped workers to keep more of their earnings, critics question its practicality and effectiveness, noting concerns about unequal tax burdens. The broader tax bill, which permanently extends many provisions of the 2017 Tax Cuts and Jobs Act, is expected to significantly increase the federal deficit by trillions over the next decade and has faced opposition from Democrats for its deep cuts to programs like Medicaid and food assistance. In Wisconsin, Democratic Sen. Brad Pfaff lamented the exclusion of a "no tax on tips" provision from the state budget and highlighted other legislative priorities including insulin cost caps and economic development. The federal and state debates illustrate the contentious and complex nature of tax policy changes affecting tipped workers and broader economic relief efforts.