The Blubber

On Tuesday, the Senate unanimously approved a bill that would end the collection of federal taxes on tips, marking progress toward a key campaign pledge from former President Donald Trump.

The measure, called the No Taxes on Tips Act, was introduced earlier this year by Sen. Ted Cruz (R-Texas). Trump initially proposed the idea while campaigning in Nevada during his 2024 run for president. It quickly gained bipartisan traction, with backing from several Democrats, including former Vice President and presidential hopeful Kamala Harris.

In a surprising development, Democrats played a major role in advancing the bill, with Sen. Jacky Rosen (D-Nev.)—a co-sponsor—leading the effort. Republicans allowed the bill to move forward under a unanimous consent agreement, a process that enables any senator to request passage of legislation on the floor so long as no other senator objects in person. Such agreements rarely succeed with significant tax policy changes, making Tuesday’s move unexpected to many observers.

“‘No taxes on tips’ was one of President Trump’s major promises to the American people,” Rosen said during floor remarks. “And I’m not one to reject a good idea just because of where it came from.”

Cruz praised Democrats for joining Republicans in backing the measure, which is expected to be part of a broader GOP legislative package addressing tax cuts, border security, and energy initiatives.

“I’m proud of what the Senate accomplished today,” Cruz said. “And I appreciate the cooperation of both parties—especially at a time of division—in supporting a common-sense reform. This is a win for workers across the country.”

Despite the bipartisan show of support, some tax analysts criticized the plan, arguing it could distract from more impactful ways to assist tipped workers, who generally don’t face high federal income tax burdens.

Progressive advocates also cautioned that the legislation's impact would be modest compared to benefits from expanding programs like the child tax credit or the earned income tax credit.

Nevertheless, several labor unions representing hospitality workers—typically aligned with Democrats—voiced support for the bill, calling it a practical way to help workers deal with the rising cost of living.