Last June, then-candidate Donald Trump caused quite a stir when he announced a plan for “no tax on tips” during his campaign.
It is no longer a campaign pledge. The Senate on Tuesday voted unanimously to approve the No Tax on Tips Act.
Democrats have not been quick to support ideas floated by Trump. The bill was introduced by Sen. Ted Cruz, R-Texas.
But it was Sen. Jacky Rosen, D-Nev., who brought it to the floor. She had no problem giving credit to Trump.
In a news release on Tuesday, Rosen said no tax on tips “was one of President Trump’s key promises to the American people, which he unveiled in my state of Nevada.” She added, “I am not afraid to embrace a good idea, wherever it comes from.”
Rosen said Nevada is home to more people earning tip income than any other state. An estimated 25% of Nevada workers earn tips.
The legislation moves to the House, where approval is also expected. The proposed law is not a total tip exemption. It limits exempted tips to $25,000. It also caps a tip earner at $160,000 in total income to receive the tax break. It also affects a related business tax credit.
In remarks on the Senate floor, Rosen pointed to the need for this kind of tax relief.
“Nevadans, our families, are being squeezed,” she said. “For many service and hospitality workers, tips aren’t extra, it’s part of their income that they use to make ends meet.”
Cruz characterized Trump’s plan as a moment of “political genius.”
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