Now that President Donald Trump’s Budget bill is out of the House and in the lap of the Senate, Senators are targeting some of the popular incentives the president used to sell it to the nation.
First on the chopping block, say senators, are Trump’s much hyped “no taxes on tips” and “no taxes on overtime” proposals the president touted last year. Also up for removal, or steep reduction, is tax relief for seniors—another of the controversial megabill’s more popular selling points.
Senators are targeting these three incentives as a means to make permanent tax incentives for research and development, business equipment and debt interest rather than capping them in 2029 as the House planned. But making them permanent will probably add hundreds of billions of dollars in lost revenue to the bill, making it difficult for Senate deficit hawks to swallow.
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House Ways and Means Chair Jason Smith (R-MO) is warning Senate Republicans against scaling back the president's tax priorities, however.
“I think that the United States Senate will not want to scale down the president’s priorities. No tax on tips, no tax on overtime are two of his top priorities,” Smith told reporters Monday. “Are there some tweaks that they can do to it that I would recommend? Yes, and I have recommended.”
Trump first proposed to end taxes on tips at a June, 2024 campaign rally in Las Vegas, as an overture to service workers in Nevada’s tourism industry, but deficit-minded Republicans in the Senate did not make that promise at campaign rallies. Politico reports when it asked Sen. Ron Johnson (R-Wis) if he believes “no tax on tips” or “no tax on overtime” are pro-growth, he answered “nope.”
Johnson sits on the Senate Finance panel.
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Politico reports Sen. Thom Tillis (R-N.C.) is recommending dialing back “no tax on overtime” rather than completely removing it. Tillis suggests pulling the proposal from employees who are designated “part-time workers”.
Read Politico’s full report at this link