President Donald Trump shared on Saturday that the legislative package he is currently preparing with Republican lawmakers will include his campaign promise to scrap taxes on tipped wages.
He brought up this plan while speaking in Las Vegas, a city well known for having many hospitality workers who depend on tips. His announcement comes as the White House and Republican leaders in Congress are working together on plans that involve broad measures related to energy, border control, and taxation, aiming to move them forward using the budget reconciliation method.
During his address at the Circa Resort and Casino, Trump made his intention clear by telling the audience, “We’re going to get it for you. No tax on tips.” He went on to say that anyone who earns money through tips, whether as a waiter, valet, bartender, bellhop, or caddy, should keep their full earnings without the government taking a share. He joked about his experiences with caddies, saying he tends to blame them when he plays golf poorly.
Trump, who was sworn in for a second term just days earlier, pointed to this tax proposal as a major factor that helped him win Nevada in the 2024 election, where he defeated Vice President Kamala Harris by roughly 3 percentage points. Harris had also backed a plan to remove taxes from tips, but only after Trump had already made it part of his campaign.
Republican Strategy Through Reconciliation
Lawmakers are looking to use the reconciliation process to advance this plan. That particular method allows legislation that affects the federal budget to be approved in the Senate with a simple majority vote, avoiding the usual 60-vote requirement to bypass a filibuster. With a 53-47 majority in the Senate, Republicans are in a position to pass this kind of proposal strictly along party lines.
The reconciliation bill Republicans are putting together is expected to include an extension of the tax cuts Trump implemented during his first term back in 2017. Those cuts are due to expire at the end of this year. Trump has also talked about other forms of tax relief being added to the package.
Push for Broader Tax Reduction
Responding to someone in the crowd who supported the idea, Trump added, “How about just no tax?” He suggested that if tariffs perform the way he expects, something broader like that could be realistic. “A thing like that could happen, if you want to know the truth,” he said.
However, eliminating taxes on tips would likely affect the government’s income. The Committee for a Responsible Federal Budget, a nonpartisan financial group, has projected that such a move might lead to a loss of $150 billion to $250 billion in federal revenue over the next 10 years.
Tensions Within the GOP
Some conservative Republicans are pushing for aggressive tax reductions before they will agree to increase the country’s debt limit, a move that’s necessary to keep borrowing and avoid financial problems. At the same time, Congress, now led by Republicans, faces a deadline of March 14 to agree on government funding and avoid a shutdown.
Republicans have not yet reached a final agreement on how to move forward with Trump’s legislative goals through reconciliation. While Trump and House Speaker Mike Johnson are backing the idea of combining everything into one major bill, several Senate Republicans have been leaning toward dividing the proposals into separate pieces of legislation.
