Rep. Alexandria Ocasio-Cortez (D-NY) railed against Republicans’ signature “big, beautiful bill” on the House floor Wednesday, warning that its promise to end taxes on tips is a “scam” that won’t protect low-income Americans from sweeping benefit cuts.
“As one of the only people in this body who has lived off of tips, I want to tell you a little about the scam of that text…the fine print,” Ocasio-Cortez said. “The cap on that is $25,000.”
AFP
Ocasio-Cortez contrasted the limited savings offered to tip workers with the expenses passed on to working families through tax increases for individuals making less than $50,000 and cuts to food assistance, Medicaid and other health coverage expansions.
“You do the math,” she said. “Is that worth it to you? Losing all your healthcare, not able to feed your babies, not being able to put a diaper on their bottom, in exchange for what?”
“This bill is a deal with the devil,” she emphasized, accusing Republicans of ballooning the national debt, gutting safety nets and giving tax breaks to billionaires. “We cannot stand for it and we will not support it. You should be ashamed.”
Currently, tips are treated as regular income on W-2 tax forms. President Donald Trump campaigned on the promise to end taxes on tips, an appealing prospect to the roughly 4 million workers who receive tips.
However, about 40% of tipped workers are already exempt from federal income tax because they make less than the standard deduction, according to the Tax Policy Center. While eligible workers would receive an average cut of $1,700 each year, higher-income workers are posed to benefit the most.
“The top 20% would receive an average tax cut of $5,768 ,while those in the bottom 20% would only get $74 on average,” according to a Economic Policy Institute report that argues raising the minimum wage would have a greater impact on workers than the No Tax on Tips provision.
The Senate narrowly passed the bill 51–50 on Tuesday, including the No Tax on Tips provision. Vice President JD Vance cast the tie-breaking vote that sent the bill back to the House with the goal of finalizing the legislation to present to Trump by July 4.
Originally published on Latin Times
