'$1800 tax increase': Why Trump’s new proposal will hit tipped workers especially hard

During his acceptance speech at the 2024 Republican National Convention, presidential nominee Donald Trump voiced his support for the "no taxes on tips" movement—which Sen. Ted Cruz (R-Texas) has also been promoting.

Cruz is the author of a bill that has been dubbed the No Taxes on Tips Act of 2024.

But critics of the movement are arguing that MAGA economic proposals offer more tax relief to the rich than to the type of workers who rely on tips.

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In a June 19 post on X, formerly Twitter, Bloomberg columnist Matthew Yglesias posted, "Ted Cruz transformed Trump's 'no tax on tips' idea into formal legislation and surprise surprise it does nothing for most low-income workers while opening up a huge loophole for highly paid professional service providers to transmute fees into tips."

In response, Brendan Duke of the Center for American Progress argued that Trump's tariff proposals will hit low-income workers especially hard.

Duke tweeted, "This doesn't even include the effects of Trump's tariff. Some quick math: I think many tipped workers would face a ~$1,800 tax increase from Trump's taxes on imports. So the zero or minimal tax cut from Cruz bill is more than offset by paying more for food and groceries."

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