The US Senate unanimously passed Senator Ted Cruz’s (R-TX) No Tax on Tips bill by a vote of 100-0 this week and sent it to the House. It is a single-subject bill. The only thing it does is create a new 100% deductible category for tips.
This is exactly how bills should be passed. It’s one subject, it’s six pages long, and it’s easy to understand.
Most importantly, this is a real tax cut bill, unlike the so-called Big, Beautiful Bill that they’re trying to pass in the House.
Cruz’s bill is S. 126. I’m pleasantly surprised that the bill passed in the Senate, and that every Republican and Democrat voted for it. That’s because this bill doesn’t contain any slimy, dirty, Swamp Accounting Tricks like most legislation that the politicians claim will cut taxes.
If it’s passed into law, Cruz’s legislation will allow tipped workers to claim a deduction capped at $25,000 a year on their tips. Their tax liability will decrease by $25,000 a year.
The bill also expands the business tax credit for payroll taxes on tips to include the beauty and spa industries, which is long overdue. Tipped workers whose total wages for the prior year were more than $160,000, such as bellhops at luxury hotels and Vegas dealers, are not eligible for the deduction.
The most beautiful thing about Sen. Cruz’s bill is that it’s a REAL tax cut. What do we mean by that?
The IRS currently collects around $40 billion a year through taxes on tipped wages. There is no provision in the Cruz No Tax on Tips bill to increase taxes on other people to make up for that $40 billion in revenue that the government would no longer be collecting.
That’s the key difference between the Cruz bill, and the Big, Beautiful Pile of Hot Sidewalk Garbage Bill that they’re trying to pass in the House.
With the Cruz bill, the government just has to live without that $40 billion a year in taxes on tips. The budget actually gets cut by $40 billion a year.
That’s not the case with the big ugly bill in the House.
The House bill raises taxes on other Americans to make up for the lost revenue the government will experience through its No Tax on Tips and No Tax on Social Security provisions. It’s not a true tax cut. The government will take in the same amount of revenue by extracting it from different categories of Americans.
People want to argue with me by claiming that the Big, Beautiful Bill doesn’t raise taxes. But what else would you call it when the bill erases entire swathes of deductions that people rely on to lower their income tax burden?
Let’s say you’re a small business owner or an independent contractor, and your tax liability for the year is $100,000 of income. But then you deduct $10,000 on miscellaneous business expenses. That lowers your tax burden so that you’re only paying taxes on $90,000 for the year.
If the IRS eliminates those miscellaneous deductions—which is exactly what the Big, Beautiful Bill does—then you owe taxes on the full $100,000. You get a tax increase. Just because the politicians don’t call it a tax increase doesn’t mean it’s not a tax increase.
I know I’m not the only one who feels disgusted by the current GOP-controlled Congress.
Big *spending bill pic.twitter.com/Alehs36yY3
— Jesse Kelly Show (@JesseKellyShow) May 16, 2025
He’s right. Why can’t we just get what we demanded when we re-elected Donald Trump for the third time?
They did the same thing to us on Obamacare.
“Oh, if you just give us control of the House, we’ll have the power of the purse and then we can eliminate Obamacare. Oh, but actually, you also have to give us control of the Senate for that to work. Okay, thanks for giving us control of the House and Senate. But if you REALLY want us to eliminate Obamacare, you have to also give us control of the White House!”
We gave the GOP control of the House, the Senate, and the White House in 2016—and then the GOP decided that Obamacare was just too precious and needed to be preserved.
Credit where credit is due: Ted Cruz’s bill cuts taxes meaningfully and it doesn’t gouge other Americans to “pay” for it. It simply cuts government spending, and that’s that.
I fully support No Tax on Tips and No Tax on Social Security, if they’re passed as real tax cuts and they reduce government spending. But if the IRS steals even a nickel out of another American’s pocket to pay for it, I cannot support it. That’s not conservatism. It’s progressivism.
