What Trump's pledge to cut taxes on tips and overtime means in practice as it moves closer to law

On the campaign trail, President Donald Trump sought to win over working-class voters in key swing states with a promise to exempt tips and overtime pay from federal income taxes.

On the campaign trail, President Donald Trump sought to win over working-class voters in key swing states with a promise to exempt tips and overtime pay from federal income taxes.

Now, Congress is inching closer to making that promise a reality, despite some concerns about how the moves would contribute to the deficit and potentially disrupt the labor market.

Both measures still face multiple hurdles. House leadership was working throughout the night Wednesday to rally its members to pass a budget bill Thursday morning that includes a tax exemption for tips and overtime before the legislation heads to the Senate. A separate bill that would exempt tips, but not overtime, from federal income taxes unanimously passed the Senate this week and will now need to be taken up by the House.

The tax breaks, which Trump first floated on the campaign trail, have generated a rare coalition of support stretching across typical partisan divides, with unions, including the Teamsters, and industry groups, like the National Restaurant Association, advocating for the tax exemptions along with some Democrats. At the same time, conservative-leaning think tanks and economists have raised concerns over how the exemptions would contribute to the deficit and potentially affect the job market by rewarding some workers over others. 

When Trump first raised the idea of ending taxes on tips, several influential Republicans told NBC News they were skeptical of it, citing rising national debt and questioning whether it would be fair to earners who don’t make tips.

https://www.nbcnews.com/politics/economics/trumps-pledge-cut-taxes-tips-overtime-means-practice-moves-closer-law-rcna208228


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