Democrats helped push the bill over the finish line because they wanted to do it too....

Senate votes unanimously to eliminate federal taxes on tips

The move promised by President Donald Trump on the campaign trail won bipartisan support in a surprising shift.

Lawrence Ukenye

The Senate voted unanimously Tuesday to pass legislation that would eliminate the collection of federal taxes on tips, moving a step closer to fulfilling one of President Donald Trump’s key campaign promises.

Sen. Ted Cruz (R-Texas) introduced the No Taxes on Tips Act earlier this year. Trump floated the proposal while stumping in Nevada during his 2024 presidential campaign, and the idea was quickly embraced by Democrats, too, including former Vice President and presidential contender Kamala Harris.

Democrats helped push the bill over the finish line Tuesday in a surprise move led by Sen. Jacky Rosen (D-Nev.), one of the measure’s co-sponsors. Republicans allowed Rosen to advance the bill through a unanimous consent agreement, where any lawmaker can go to the Senate floor and seek passage of legislation as long as no other senator lodges an in-person objection at that same time. Unanimous consent success rates are not high for major changes to the tax code, and the maneuver Tuesday took political observers by surprise.

“‘No taxes on tips’ was one of President Trump’s key promises to the American people,” Rosen said on the Senate floor. “And I am not afraid to embrace a good idea wherever it comes from. “

Cruz, in turn, praised Democrats for supporting the elimination of federal taxes on tips, which is expected to be part of the GOP’s party-line package of tax cuts and extensions, border security investments, energy policy and more.

“I’m proud of what the Senate just did, and I commend Democrats and Republicans even in a time of partisan division, coming together on a common-sense policy,” said Cruz. “I think that’s great for workers in all 50 states.”

Still, some tax experts panned the proposal, citing concern that it might overshadow more effective proposals for supporting tipped workers, who don’t typically pay high levels of federal income tax.

Progressive groups also warned that the bill’s benefits would pale in comparison to the help workers would receive if Congress were to, say, expand the child tax and earned income tax credits.

At the same time, some unions representing hospitality workers, which typically support Democrats, endorsed the idea as a way to help workers keep pace with the rising cost of living.