Rep. Alexandria Ocasio-Cortez raised concerns Wednesday about the $25,000 limit placed on the tip income exemption included in the Senate version of President Trump’s expansive tax and spending proposal. Speaking from the House floor, she pointed to what she sees as a major gap between how the bill is being presented and what it actually delivers for everyday workers.
Having once earned a living through tipped work herself, Ocasio-Cortez criticized the cap as misleading. She argued that while the provision offers a tax break on tips, it is capped in a way that leaves out many lower-income workers, especially when considered alongside the broader cuts proposed in the legislation.
She noted that while workers might receive some tax relief on tip income, that benefit is overshadowed by what the bill takes away reduced access to food assistance, health care programs like Medicaid and the Affordable Care Act, and other safety net supports for families making under $50,000.
The updated legislation, sent back to the House after Vice President Vance cast a tie-breaking vote in the Senate, introduced the $25,000 cap whereas the earlier House version did not include any such limit. Although the policy does not raise tax rates on low-income Americans directly, analysts say that once program reductions are factored in, many could see a decline in their actual take-home income.
Ocasio-Cortez asked Americans who depend on tips to consider the trade-offs. She painted a stark picture of what losing critical support could mean in daily life reduced access to food and health care, difficulty affording basic items like diapers arguing these losses far outweigh the benefits of the tip deduction.
She characterized the bill as fundamentally harmful, claiming it prioritizes benefits for the wealthy over support for working families. In her view, the legislation adds to the national debt, prioritizes military and corporate interests, and chips away at public health and economic dignity in the process.
Her remarks reflect ongoing frustration from progressive lawmakers, who have increased pressure on Republicans in swing districts to reconsider their support for a bill that includes sharp reductions in Medicaid and nutritional aid programs.
Meanwhile, House leadership continues working to rally enough votes to push the bill forward, aiming to deliver it to the president ahead of the July 4 deadline.
