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The Graphic Truth: How many Americans will benefit from a tax cut on tips?

June 05, 2025
 Zac Weisz
Paige Fusco

Just as President Donald Trump promised on the campaign trail, the House-passed tax-policy bill will end taxes on tips. However, only a small proportion of Americans will actually benefit from this policy, as this Graphic Truth shows. Even among Americans in the bottom quartile of household income, just 5% have a tipped occupation. The “no tax on tips” policy has faced criticism for an entirely separate reason: Hedge fund managers could exploit the bill to limit their own tax liability, the left-leaning Center for American Progress warned. The policy was a winner on the campaign trail, but that might change if it becomes law.

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