President Donald Trump announced in a speech in Las Vegas that he is working with Republican lawmakers to pass a legislative package that includes his campaign promise to eliminate taxes on tips. This move is aimed at benefiting workers in industries that rely heavily on tips, such as the hospitality and service sectors. Trump credited this proposal with his victory in Nevada during the 2024 election.
The legislative package is being considered under the budget reconciliation process, which would allow for the passage of sweeping proposals on energy, the border, and taxes without needing 60 votes in the Senate to overcome a filibuster. Trump’s plan includes an extension of tax cuts from his first term and other tax cuts he has suggested. The Committee for a Responsible Federal Budget estimated that eliminating taxes on tips could reduce federal revenue by $150 billion to $250 billion over the next decade.
Some conservative Republicans are pushing for significant tax cuts in exchange for raising the debt ceiling, while others are focused on government funding before a potential shutdown on March 14. There is disagreement within the Republican party on the best approach to passing Trump’s agenda through reconciliation, with Trump and House Speaker Johnson favoring one bill while Senate Republicans are considering multiple pieces of legislation. Trump expressed optimism about the possibility of completely eliminating taxes if tariffs prove successful.
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