Senator Ted Cruz (R-Texas) has introduced legislation to exempt tips, including tips in the form of credit and debit card charges, from taxes, following an idea that former President Trump promoted during a recent trip to meet with Republicans on Capitol Hill.
“American workers in dozens of industries depend on reduced wages to sustain themselves,” Cruz said in a statement.
He said his bill, the No Tax on Tips Act, would ensure that workers who receive tips, such as restaurant servers, “keep all those tips.”
The proposal immediately drew support from other Republican senators, including Senators Rick Scott (R-Florida), Steve Daines (R-Mont.) and Kevin Cramer (RN.D.
“We need to take action now to reduce costs for American workers and get our economy back on track,” Scott said in a statement.
The proposal would exempt tips provided in the form of cash, credit and debit card charges, and checks from federal income tax, allowing taxpayers to claim a 100% above-the-line deduction for tipped wages.
The plan’s price tag could add billions to annual deficits. The Committee for a Responsible Federal Budget estimated Sunday that exempting tip revenue from federal income and payroll taxes could lead to a $150 billion to $250 billion reduction in federal revenues over a decade. .
Several House Republicans have offered a companion measure in the lower chamber, the Tax-Free Tips Act.
It is supported by Reps. Thomas Massie (R-Ky.), Matt Gaetz (R-Florida) and Marjorie Taylor Greene (R-Ga.).
But some conservatives aren’t embracing the idea.
Rep. Chip Roy (R-Texas), a prominent House conservative, wrote on the social media platform wages that do not. receive tips.
This story originally appeared on thehill.com read the full story
