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The Senate unanimously passed the “No Tax on Tips Act” on Tuesday, a bill that would eliminate federal taxes on tips and that President Donald Trump made a campaign promise when running for reelection. It now goes to the House for a vote. If passed, the legislation would create a new tax deduction of up to $25,000 on income made from tips. The legislation comes as many Americans are feeling an added economic burden in the face of inflation, higher prices, and skyrocketing living costs. Here’s what you need to know. What is the No Tax on Tips Act? Bill S. 129, or the No Tax on Tips Act, creates a federal income tax deduction of up to $25,000 a year for certain types of cash tips for eligible employees. (These are cash tips that workers report to employers for withholdings on payroll taxes.) Who is eligible for for the tax break? The deduction applies to employees who earn up to $160,000 in 2025; that amount will likely increase with inflation in the years ahead and applies to tips received by an individual . . . in an occupation which traditionally and customarily received tips on or before December 31, 2023,” including tips via cash, credit and debit card, and check, according to The Washington Post. Who supports the bill? Both Republicans and Democrats support the bill. Republican Sen. Ted Cruz of Texas introduced it back in January. Democratic Sen. Jacky Rosen of Nevada brought the bill to the Senate floor, where it passed with unanimous consent, which usually happens with more routine legislative matters. Rosen, along with Democratic Sen. Catherine Cortez Masto, also of Nevada, cosponsored the legislation. Who championed the No Tax on Tips Act? During the 2024 presidential election, both candidates Trump and Harris supported versions of the idea, with Trump making it a campaign promise during a June 2024 rally in Nevada, a state where 25% of workers rely on tips. According to The Hill, it was one way Trump set out to court working-class voters. What do critics say about the No Tax on Tips Act? The National Restaurant Association supports the bill; however, critics say eliminating taxes on tips is an empty win for many hourly workers who don’t make enough to pay federal income taxes. Critics also say it keeps workers at a lower overall pay rate, as opposed to creating a higher minimum wage. What happens next? The bill now heads to the House of Representatives for a vote. A version of No Tax on Tips is also included in Trump’s giant tax and immigration bill, dubbed the One Big Beautiful Bill Act. On the Senate floor, Cruz said he was confident the bill would eventually pass either way.
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E-Commerce
It was perhaps the worst kept secret in Silicon Valley. When he wasnt running his design firm LoveFrom, Jony Ive was building another new company, just around the corner in San Franciscos Jackson Square, called io. Focused on the future of AI hardwarewhat some have oversimplified as the iPhone of AIio was rumored to be the physical side of OpenAIs groundbreaking software. Now, the rumors are reality. OpenAI is acquiring io for $6.5 billion. From a news release: The io team, focused on developing products that inspire, empower, and enable, will now merge with OpenAI to work more intimately with the research, engineering, and product teams in San Francisco. As io merges with OpenAI, Jony and LoveFrom will assume deep design and creative responsibilities across OpenAI and io. LoveFrom will remain independent. It became clear that our ambitions to develop, engineer, and manufacture a new family of products demanded an entirely new company. And so, one year ago, Jony founded io with Scott Cannon, Evans Hankey, and Tang Tan. Scott Cannon led teams on the Mac and iPad development. Evans Hankey was a senior member of the Apple design team who took over Ives own role after he left Apple. Tang Tan led design on the iPhone for years. It takes no keen analysis to observe how proven and talented this team is at shipping impactful products. But what are they doing with OpenAI, exactly? The io team, focused on developing products that inspire, empower, and enable, will now merge with OpenAI to work more intimately with the research, engineering, and product teams in San Francisco. As io merges with OpenAI, Jony and LoveFrom will assume deep design and creative responsibilities across OpenAI and io. In other words, io will be making products, plural, for OpenAI, with an undisclosed timeline for release. What it all adds up to is, perhaps, the greatest called bluff in Silicon Valley history. Ive had already brought much of his design team with him when he founded LoveFrom. And others he brought to io. Now, the most hyped AI company of our age is teaming up with the makers of the most defining consumer hardware of the last century. Whatever they build together will define both of their legacies to come.
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E-Commerce
With President Donald Trump’s multitrillion-dollar tax breaks package at risk of stalling, House Speaker Mike Johnson and conservative Republican holdouts are heading Wednesday to the White House for the last-ditch talks to salvage the “big, beautiful bill.” Johnson, R-La., had hoped to vote as soon as Wednesday on the 1,000-page plus bill after grinding through an all-night committee hearing, a final step in the process. But debate dragged into midday. Democrats, without the votes to stop Trump’s package, are using all available tools to press their opposition and capitalize on the GOP disarray. We believe its one big, ugly bill thats going to hurt the American people, said House Democratic leader Hakeem Jeffries of New York as he and his team testified before the committee. Hurt children, hurt families, hurt veterans, hurt seniors, cut health care, cut nutritional assistance, explode the debt, he said. Trump had instructed the Republican majority to quit arguing and get it done, putting his own political influence on the line. But the Republican president failed to move many skeptics during his Capitol Hill visit this week and GOP leaders struggled through the the night on crafting last-minute deals. But for every faction of the slim House majority that Johnson appeases, he is losing others. A tentative deal with GOP lawmakers from New York and other high-tax states to boost deductions for local taxes to $40,000 alarmed the most conservative Republicans, worried it will add to the nations $36 trillion debt. Rep. Andy Harris, R-Md., the chairman of the hard-right House Freedom Caucus, said he did not believe the package could pass in a House vote, but there is a pathway forward that we can see. We want to deliver the presidents agenda, he said. It’s a make-or-break moment for the president and his party in Congress. They have invested much of their political capital during the crucial first few months of Trump’s return to the White House on this legislation. If the House Republicans fall in line with the president, overcoming unified Democratic objections, the measure would next go to the Senate. Were doing very well. Its very close Trump said at the White House. A fresh analysis from the Congressional Budget Office said the tax provisions would increase federal deficits by $3.8 trillion over the decade, while the changes to Medicaid, food stamps and other services would tally $1 trillion in reduced spending. The lowest-income households in the U.S. would see their resources drop, while the highest ones would see a boost, the CBO said. Republicans convened the House Rules Committee hearing shortly after midnight, but Johnsons Memorial Day deadline for House passage was slipping as lawmakers prepared to depart for the holiday. At its core, the package is centered on extending the tax breaks approved during Trump’s first term in 2017, while adding new ones he campaigned on during his 2024 campaign. To make up for some of the lost revenue, the Republicans are focused on spending cuts to federal safety net programs and a massive rollback of green energy tax breaks from the Biden-era Inflation Reduction Act. Additionally, the package tacks on $350 billion in new spending, with about $150 billion going to the Pentagon, including for the president’s new Golden Dome defense shield, and the rest for Trumps mass deportation and border security agenda. The package title carries Trump’s own words, the One Big Beautiful Bill Act.” As Trump promised voters on the tax front, the package proposes there would be no taxes on tips for certain workers, including those in some service industries; automobile loan interest; or some overtime pay. There would be an increase to the standard income tax deduction, to $32,000 for joint filers, and a boost to the child tax credit to $2,500. There would be an enhanced deduction, of $4,000, for older adults of certain income levels, to help defray taxes on Social Security income. To cut spending, the package would impose new work requirements for many people who receive health care through Medicaid. Able-bodied adults without dependents would need to fulfill 80 hours a month on a job or in other community activities. Similarly, those who receive food stamps through the Supplemental Nutritional Assistance Program, known as SNAP, would also face new work requirements. Older Americans up to age 64, rather than 54, who are able-bodied and without dependents would need to work or engage in the community programs for 80 hours a month. Additionally, some parents of children older than 7 years old would need to fulfill the work requirements; under current law, the requirement comes after children are 18. Republicans said they want to root out waste, fraud and abuse in the federal programs. The Congressional Budget Office has estimated 8.6 million fewer people would have health insurance with the various changes to Medicaid and the Affordable Care Act. It also said 3 million fewer people each month would have SNAP benefits. Conservatives are insisting on quicker, steeper cuts to federal programs to offset the costs of the trillions of dollars in lost tax revenue. GOP leaders have sped up the start date of the Medicaid work requirements from 2029 to 2027. At the same time, more moderate and centrist lawmakers are wary of the changes to Medicaid that could result in lost health care for their constituents. Others are worried the phaseout of the renewable energy tax breaks will impede businesses using them to invest in green energy projects in many states. Plus, those lawmakers from New York, California and other high-tax states want a bigger state and local tax deduction, called SALT, for their voters back home. As it stands, the bill would triple whats currently a $10,000 cap on the state and local tax deduction, increasing it to $30,000 for joint filers with incomes up to $400,00 a year. But advocates wanted more. Under the emerging deal, the cap would increase the deduction to $40,000 with an income limit of $500,000, according to a person granted anonymity to discuss the private talks. The cap would phase down for incomes above that level. The Committee for a Responsible Federal Budget, a nonpartisan fiscal watchdog group, estimates that the House bill is shaping up to add roughly $3.3 trillion to the debt over the next decade. Lisa Mascaro, Kevin Freking, Leah Askarinam, and Joey Cappelletti, Associated Press Associated Press writer Chris Megerian contributed to this report.
Category:
E-Commerce
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