The “No Tax on Tips Act,” introduced by several U.S. senators in 2024, proposed to exclude tipped income from federal income taxes. An analysis from Yale’s Budget Lab placed the bill in context, showing that tipped workers make up only a small portion of the U.S. workforce—about 2.5% in 2023—and tend to be younger and lower-income. Additionally, 37% of those workers already pay little or no federal income tax. While a "no tax on tips" solution is commendable, it would only benefit about 1.6% of working Americans.
Very Few Workers Will Actually Benefit from "No Tax on Tips"
Jeff Graber
Source Title:
The “No Tax on Tips Act”: Background on Tipped Workers
Source Format:
Blog Article
Publication Title:
The Budget Lab at Yale
Publication Date:
June 24, 2024
Accessed:
2025-07-07
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