Andrew Assisi | MediaLab@FAU
Mar 27, 2025
Donald Trump’s presidential campaign was headlined by the promise of his “big, beautiful bill,” which included promises to eliminate taxes on tips, overtime pay, and Social Security benefits.
On Feb 25, a GOP-backed budget plan, known as H.Con.Res.14, was passed by the House of Representatives in a narrow 217-215 vote. The plan included a stipulation to throw away taxes on overtime pay, one of President Trump’s promises on his “big, beautiful bill.”
Despite the proposal being passed, taxes on overtime pay will not be removed immediately. The signing of H.Con.Res.14 was just the first step toward Trump’s entire budget plan going into effect. A separate proposal to further implement the budget plan of no taxes on tips, no taxes on overtime pay, and no taxes on Social Security benefits will be heard in the Senate.
The economic repercussions of Trump’s policies promised in his 2024 presidential campaign, including the No Tax on Tips Act, could be very costly. The act was introduced to the House of Representatives on Jan. 16 by two Republican congressmen from Florida, Vern Buchanan and Byron Donald.
“I look at the No Tax on Tips Act as I would a possible investment and if I would recommend it to a client,” said Nick Coke, an investment advisor at Titan, a wealth management firm in New York City, though Coke works remotely from Coconut Creek. “Overall, it may seem like a great idea to all restaurant workers and benefit them in the beginning, but in the long run it could do more harm than good.”
The nonpartisan Committee for a Responsible Federal Budget estimated that ending taxes on tips alone could add between $100 billion and $550 billion in debt over the next decade. As well as the entire “big, beautiful bill,” increasing the country’s existing debt by up to $11.25 trillion over the next 10 years.
“I cannot blame anyone in the restaurant industry for only looking at how their paycheck will be affected and not the entire economy, but some people outside of the service industry may describe this as a short-sighted and possibly selfish viewpoint,” Coke said.
Tipping is a fundamental aspect of the service industry in the United States, where servers and bartenders rely heavily on the gratitude of customers to make a good wage.
Although working as a server or bartender in the service industry is often seen as a fast way to earn cash, thanks to the strong tipping culture in America, income in these roles can be highly volatile and unpredictable. Most service workers in Florida are hoping for the possible signing of the No Tax on Tips Act for more consistency and a rise in income for them.
“Sometimes I will make $50 in 6 hours one night and $250 in 6 hours the next night,” said Renee Young, a 62-year-old bartender in Boca. “I never know what I will make in a month, which is scary.”
Housing in America has increased significantly over the past year, and South Florida is one of the more expensive areas to live in. In 2024, Florida experienced a 6.5% increase in rental rates. Service workers struggle to survive in this economy, some living paycheck to paycheck.
“I have thought about moving to somewhere like North Carolina because of the rent price here,” said Matthew Allison, a 24-year-old server at Seasons 52 in Boca Raton.
With cost of living increases, service workers have had to work more days and longer shifts to make ends meet. If that is not enough, many have just started looking for new or additional jobs.
“I have been looking for another job and will just work two jobs right now,” Allison said. “I’m hoping if there is no tax on our tips, I can make enough money to stay here.”
If service workers have more financial security, they may be less likely to leave their jobs in search of higher-paying opportunities. This would benefit the workers and the business, as a lower turnover rate will reduce training costs and keep a more experienced staff around.
Some believe no tax on tips may be a moot point, and no matter what, service workers can only make a specific range of money on a nightly basis. It depends on the customers and how generous they feel that night.
“I think everyone hears ‘no tax on tips’ and immediately says yes, but there are factors that might make it more complicated than people think,” bartender at Outback Steakhouse Catherine Joseph said. “The money we make is all up to how well the customer treats us, not the business or the government.”
Other than the country’s economic ramifications, the potential cause for concern against the No Tax on Tips Act is the possibility of businesses attempting to lower workers’ salaries due to them making more money through tips. Also, there is the possibility that customers will leave smaller tips, knowing that the server or bartender will keep all of the money they give them.
Service workers may ultimately earn the same amount as before Trump returned for a second term in office with promises of great economic prosperity. However, polls show that a majority of Americans support the no tax on tips concept.
The future of Florida’s economy remains uncertain, yet service workers strongly favor making their earnings untaxed.