Scott Bessent, the Treasury Secretary for the U.S. Department of the Treasury, announced that recent polling indicates strong public support for the One Big Beautiful Bill, which includes a proposal to eliminate taxes on tipped income. The statement was made on X.
"New polling shows overwhelming support for the One Big Beautiful Bill," said Scott K Bessent, U.S. Treasury Secretary. "82% of Americans support a 15% tax cut for working families. 77% support no tax on tips. This is what commonsense tax reform looks like. Americans want this. Let's deliver."
According to the Internal Revenue Service (IRS), the taxation of tips has been a contentious issue in the United States, particularly affecting service industry workers who rely heavily on gratuities. Under current IRS regulations, employees must report any tips received as taxable income. This includes cash tips, tips from credit card payments, and those distributed through tip pools. The IRS requires employees to report tips of $20 or more in a month to their employer by the 10th day of the following month. These reported tips are then included in gross income and are subject to federal income tax, Social Security tax, and Medicare tax.
A 2021 survey by the Pew Research Center found that 16% of Americans have earned money through an online gig platform. Among these gig workers, 58% reported that this income was essential or important for meeting basic needs. This highlights many individuals' financial reliance on gig work and underscores how tax policies impact their livelihoods.
Many service industry workers earn a significant portion of their income from tips. According to the U.S. Bureau of Labor Statistics, as of May 2023, the median hourly wage for waiters and waitresses, including tips, was $14.00. In some states, however, tipped employees can receive a base pay as low as $2.13 per hour, with tips expected to cover the gap to reach the federal minimum wage. Due to this reliance on tip income, changes in tipping policies can substantially impact workers' total earnings.
Bessent is an American investor and former chief investment officer at Soros Fund Management, where he oversaw $30 billion in assets. He later founded Key Square Group, a macro investment firm backed by George Soros. In 2025, Bessent was appointed U.S. Treasury Secretary under President Trump.