HAS NO TAX ON TIPS/OVERTIME/SOCIAL SECURITY HELPED THE GOP? At a recent midterm campaign rally in Sioux City, Iowa, President Donald Trump spent quite a while talking about his policies of no tax on tips, no tax on overtime, and no tax on Social Security. Since the measures, with an additional tax cut on car loan interest, were passed into law in last year’s One Big Beautiful Bill Act, the White House has counted on the tax cuts to appeal to working- and middle-class voters in the midterm elections.
In Sioux City, Trump stressed that it is a very big deal. “I signed the largest tax cuts in American history with the great big beautiful bill, including no tax on tips, no tax on overtime, and no tax on Social Security,” he said. But then Trump took a detour into a discussion of the cognitive tests he has taken — one of his quirkier interests — and from there into a discussion of all sorts of things. Nearly an hour passed before he returned to no tax on tips, overtime, and Social Security.
The president is an inveterate audience researcher. He asks crowds their opinions on everything. And in Sioux City, he extolled the benefits of the no-tax policy and then asked, “Which is your favorite? Ready?” He started with no tax on tips, for which there was moderate applause.
“They don’t tip farm workers that much, right?” Trump said, acknowledging the somewhat tepid reaction. “You’re more traditional. Give me a check, right? So not a lot of tipping.” He moved on to ask about no tax on overtime. There was significantly more applause. And then he asked about no tax on Social Security. There was great applause. “That’s generally the one,” Trump said.
As much as Trump has talked about his no-tax innovation on the campaign trail, the issue hasn’t received a lot of national media attention. Here’s a theory on why: it doesn’t connect with the journalists who cover the campaign. They don’t work for tips. Most of them don’t receive overtime. And nearly all of them are below the Social Security age. They just don’t see what it’s about.
But it is in fact a major accomplishment. In June, the Treasury Department announced that huge numbers of Americans had taken advantage of the cuts:
– “Over 7.5 million filers have claimed No Tax on Tips, with an average deduction of over $7,000.”
– “Over 29 million filers have claimed No Tax on Overtime, with an average deduction of over $3,100.”
– “Over 35 million seniors have claimed the Enhanced Deduction for Seniors, with an average deduction of over $7,500.”
– “Over 1.4 million filers have claimed the No Tax on Car Loan Interest, with an average deduction of $1,800.”
That pretty much explains the applause levels in Sioux City.
Together, the cuts added up to around $82 billion that remained in workers’ pockets, rather than being paid to the government. “President Trump delivered on his promise to provide tax relief to hard working families, securing more than $82 billion in individual tax relief,” White House spokesman Matthew Middleton said in a statement. “This administration is fully committed to making life more affordable for American families and ensuring that Promises Made are Promises Kept.”
Last year, when the midterm elections were more than 12 months away, administration officials counted on the tax cuts and other economic measures from the One Big Beautiful Bill Act “kicking in” in 2026 to improve the voters’ economic situation before the elections. Indeed, they did; a lot of economic indicators — growth, income, consumer spending, manufacturing, low poverty — look good right now.
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But the cost of living is still high, kept high in part by energy prices that have risen as a result of Trump’s decision to start the Iran war. What Democrats call “affordability” is still the biggest issue of the midterm campaign, and it helps Democrats and hurts Republicans. All signs point to Democrats winning control of the House, and it is entirely possible they will win the Senate, too. If the tax cuts on tips, overtime, Social Security, and car loan interest were supposed to help Republicans keep control of Congress, it appears they did not work.
But that doesn’t mean the cuts aren’t a big deal. Over the outraged opposition of Democrats, Trump and congressional Republicans gave Americans significant tax relief at a time when they needed it most. That made a difference in their lives, if not, finally, in their midterm votes.
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[ H/T Washington Examiner ]
