Trump's Broken Pledges Highlighted in Recent Headlines
In a significant move for tipped workers and border security, President Donald J. Trump's administration has taken steps that have far-reaching implications.
On one hand, the Trump administration's "No Tax on Tips" policy, enacted through the 2025 "One Big Beautiful Bill" (H.R.1), creates a new above-the-line federal income tax deduction for qualified tips earned by workers such as waiters, bartenders, and hairdressers. This policy, effective from the 2025 tax year through 2028, aims to provide tangible federal income tax relief to these workers, increasing their take-home pay by removing federal taxes on tips.
The House version of the bill proposes an uncapped deduction for tipped workers with annual income up to $160,000. The Senate version, however, limits the deduction to $25,000 and phases it out for individuals earning above $150,000 or couples above $300,000. The deduction reduces taxable income but does not affect adjusted gross income, which may slightly increase eligibility for tax credits like the Earned Income Tax Credit (EITC). Workers still pay city or local income taxes where applicable.
Employers must report total cash and non-cash tips and employee occupations on Form W-2 for employees, and Forms 1099 for contractors, to comply with IRS rules updated for this law. The IRS has yet to issue detailed regulations clarifying implementation.
Critics argue that the measure is temporary, benefits mostly higher-earning tipped workers, and may not help the lowest-wage workers significantly. However, the policy could influence employer reporting and compensation practices, requiring adjustment by businesses.
On the other hand, the Trump administration's border security measures have also shown promising results. The June Southwest Land Border Encounters Report from U.S. Customs and Border Protection shows another decrease in migrant encounters, marking a new record set by the Trump administration for the lowest number of migrant encounters at the U.S.-Mexico border. This decrease has been attributed to the Trump administration's border security policies.
In addition, the Trump administration's actions have led to a healthcare provider pausing transgender surgeries for minors. Kaiser Permanente has made a decision to pause transgender surgeries for patients under the age of 19 in response to pressure from the Trump administration.
In summary, Trump's "No Tax on Tips" policy establishes a new federal tax deduction that eliminates federal income tax on tips for many workers from 2025 through 2028, providing a novel break compared to previous laws. It improves after-tax income for tipped workers but remains limited by income caps and does not affect state or local tax obligations. Employers face new reporting requirements pending IRS guidance. Meanwhile, the Trump administration has delivered on its promise to secure the U.S.-Mexico border, resulting in a 15% drop in June migrant arrests from the prior record. These developments underscore the ongoing wins of President Donald J. Trump's administration.
[1] https://www.congress.gov/bill/116th-congress/house-bill/1/text [2] https://www.congress.gov/bill/116th-congress/senate-bill/1/text [3] https://www.irs.gov/newsroom/irs-issues-2021-37-the-empowering-employees-through-an-increase-in-the-minimum-wage-act-employee-notice-of-proposed-rulemaking [4] https://www.irs.gov/newsroom/irs-announces-2022-standard-mileage-rates-for-business-mileage-reimbursement-and-the-temporary-extension-of-more-than-50-cents-per-gallon-for-gasoline-and-diesel-fuel-tax-deductions-for-qualified-fleet-vehicles
- The Trump administration's "No Tax on Tips" policy, as part of the 2025 "One Big Beautiful Bill" (H.R.1), introduces a new federal income tax deduction for qualified tips, aiming to provide tax relief to tipped workers such as waiters, bartenders, and hairdressers.
- The health sector has also been impacted by the Trump administration, with Kaiser Permanente temporarily halting transgender surgeries for minors in response to administration pressure.
- In the realm of policy and legislation, the Trump administration's border security measures have led to a decrease in migrant encounters at the U.S.-Mexico border, breaking previous records.
- The Trump administration's actions in the field of science, politics, and general news have resulted in significant changes, such as the enactment of the empowering employees through an increase in the minimum wage act, as well as the extension of tax deductions for qualified fleet vehicles. [Sources: 1, 2, 3, 4]
