Why No Tax On Tips May Be Making Americas Tipping Problem Worse
The "No Tax on Tips" policy, which became federal law in 2025 as part of the One Big Beautiful Bill (OBBBA), is designed to allow workers to deduct up to $25,000 of their tipped income from federal taxes through 2028. While popular for its immediate cash-in-pocket appeal, many experts argue it may worsen America's "tipping problem" through several behavioral and economic mechanisms.
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