Carl Sobuchinski, president and owner of Table 301 Restaurant Group, discusses Trump's plan for a “no tip tax” on Cavtuo: Coast to Coast.
One of the most popular campaign promises of President-elect Donald Trump was this Eliminate tax on tips For working Americans
Now, Congress is helping him keep that promise, FOX Business has learned.
On Thursday, Republican Sen. Ted Cruz of Texas reintroduced the No Tipping Tax Act, a bipartisan bill he first introduced last year that aims to exempt tips for service workers from federal income taxes. The text of the amended bill has been obtained exclusively by FOX Business.
If the law is approved and signed, this bill will be amended Internal Revenue Code Allows Americans working in the food and beverage and beauty services industries to claim a 100% deduction for cash and non-cash tips for wages up to $25,000. Employees earning more than $150,000 are not eligible for the tip tax exemption.
It also fulfills part of Trump's broader campaign promise to extend tax cuts for middle-class Americans and small businesses amid Biden-era inflation.
“American workers in many industries rely on tip wages to make ends meet,” Cruz said in an exclusive statement to Fox Business. “Today, I'm introducing my bipartisan No Tipping Tax Act—legislation I authored to fulfill President Trump's promise to end the malpractice of the voluntary gratuity tax.”
ART LAFFER: TRUP TAX CUT HAS TO HAPPEN IMMEDIATELY

Former U.S. President Donald Trump speaks to guests during a campaign rally at auto parts maker Derrick Enterprises on Sept. 27, 2023, in Clinton, Michigan. (Scott Olson/Getty Images/Getty Images)
This law is not without critics. US budget deficit under President Biden It's now close to $2 trillion — a historic level except when the US government shut down businesses during Covid and distributed free money to make up the difference. Critics say the tax cuts could add to the deficit and pressure the bond market, which has recently sold off, leading to higher interest rates amid fears of a deficit.
Some have raised concerns about the practicality of previous taxes on the guidance Workers are tipped They often earn less than the federal income tax threshold and may not even benefit from such a tax break.
Cruz introduced the original legislation in June of last year, after one of Trump's campaign rallies in which he floated the idea of getting rid of the tip tax to appeal to service workers, who make up roughly 40 percent of the U.S. workforce. brought up Given that the Republicans were in the minority last congressCruz's bill, which was supported only by Republicans, did not pass.
This time, the bill has bipartisan support with Sens. Jackie Rosen, D-Nev., Catherine Cortez Masto, D-Nev., as well as Republicans Steve Deans, R-Mont., and Pete Ricketts, R-Nov. Neb. A companion bill has also been introduced in the lower house by Republican Rep. Vern Buchanan of Florida.
Study: US economy could lose nearly 6 million jobs if Congress lets tax cuts expire

Unidentified waiter calculates customer's tip or payment while working in restaurant. The IRS issued a notice on Monday regarding a proposed reporting program. (iStock)
Cruz told FOX Business that given the Republican Party's control of the House and Senate, and the party's eagerness to address the economic needs of working Americans affected by inflation, he is confident the revised legislation will pass quickly into law.
“I've long believed that the Republican Party should be welcoming to bartenders, waiters and waitresses, and this bill is an important step toward ensuring that the economic needs of working Americans are met,” he said. This pro-worker bill will provide relief to families facing rising costs caused by the Biden administration's inflationary policies.”
The bill has already been endorsed by industry groups including the National Restaurant Association, the Professional Beauty Association and the International Suffrage Association, which say the measure has the potential to benefit restaurant workers and small businesses as well as help attract workers.