A new House GOP bill aims to end taxation on tips after former President Trump promoted the idea earlier this month.
Reps. Thomas Massie, R-Ky., and Matt Gaetz, R-Fla., introduced the legislation on Tuesday, with Rep. Marjorie Taylor Greene, R-Ga., joining as a co-sponsor.
Gaetz and Greene are two of Trump’s most vocal allies on Capitol Hill.
“As the cost of living continues to rise, the hardworking men and women in the service industry, many of whom may be working a second job to make ends meet, must be allowed to keep every dollar of tip money they earn,” Gaetz wrote on X.
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Greene said on the platform, “President Trump is right, no one should be taxed on the tips they receive for providing a good service.”
Massie pointed out that the proposal was pioneered by Libertarian Ron Paul, a former House lawmaker and presidential candidate. He said in a press release statement, “With inflation raging, it only makes sense to eliminate the tax on tips and provide relief to working folks.”
However, not all Republicans are sold on the idea, despite Trump’s support.
Rep. Chip Roy, R-Texas, wrote on X that Massie and Gaetz are “two good friends” but that he would “need them to explain why we should treat minimum wage [and] low wage non-tip earners differently.”
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Trump had raised the idea during his June 9 rally in Las Vegas, telling the crowd, “When I get into office, we’re not going to charge taxes on tips, people making tips.”
“We’re going to do that right away, first thing in office, because it’s been a point of contention for years and years and years,” Trump said.
Multiple GOP senators said he again raised the idea in a closed-door meeting with them last week.
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However, the nonpartisan Committee For a Responsible Federal Budget (CRFB) projected that if implemented, the proposal could reduce federal revenue by at least $150 to $250 billion over a decade.
Currently, both cash and non-cash tips are subject to federal income taxes.
When asked for a response to both the GOP bill and CRFB analysis, Trump spokeswoman Karoline Leavitt told Fox News Digital, “As President Trump announced in the great state of Nevada, he supports eliminating taxes on tips and when he is back in the White House, he will work with Congress to get it done.”
“The only people who disagree with President Trump’s promise to put more hard-earned money back into the pockets of American workers are Washington bureaucrats and Democrats like Joe Biden, who want to raise taxes and have aggressively stepped up the IRS going after workers and families.”
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