The “no tax on tips” proposal in Donald Trump’s budget plan has been touted by the president as a win for working-class Americans—but critics say it’s nothing more than a smokescreen for deep, harmful cuts elsewhere. Representative Alexandria Ocasio-Cortez (D-NY) called out the contradiction on Wednesday, drawing from her own experience working for tips.
“As one of the few members of Congress who’s actually lived off tips, let me explain the fine print behind this so-called gift,” Ocasio-Cortez said on the House floor. “The cap for this benefit is $25,000—and meanwhile, this same bill raises taxes on people earning under $50,000 a year, slashes food assistance, cuts Medicaid, and kicks families off the Affordable Care Act.”
She didn’t hold back in her criticism of the broader budget package.
“If you’re at home living off tips, ask yourself: is this worth it? Losing your health care, struggling to feed your kids, not being able to afford diapers—just to save a few dollars on taxes?” she asked. “This bill is a deal with the devil. It balloons the national debt, militarizes the economy, and strips away basic dignity and health care—just to give billionaires like Elon Musk another tax break. We will not support it. You should be ashamed.”
The “no tax on tips” provision may sound appealing, but as critics point out, many lower-income workers already qualify for the standard tax deduction. For most tipped workers, who often earn below a living wage, the real value of the tax change is minimal—especially when weighed against the devastating cuts to social programs they rely on.
In effect, the plan benefits higher earners more than the workers it claims to help. For those struggling to make ends meet, the math just doesn’t add up.
