Lately, a phrase has been trending on social media, especially in the U.S.: “No Tax on Tips.” But what exactly does this campaign stand for? Who does it affect? And most importantly, what kind of consequences could it have for service industry workers worldwide?
In this post, we’ll dive into the origins of the “No Tax on Tips” movement, the latest updates, potential effects, and how this issue compares with the situation in countries like Turkey.
🧾 What Is “No Tax on Tips”?
The “No Tax on Tips” movement advocates for eliminating income tax on tips earned by workers in the service industry—especially in restaurants, cafes, bars, and hotels. The main argument is that workers, who often earn minimum wage or less, should be allowed to keep 100% of the tips they earn directly from satisfied customers.
🇺🇸 The Movement in the United States
This campaign went viral in late 2024 after gaining support from social media influencers and public figures—most notably Elon Musk. It quickly gained momentum with the hashtag #NoTaxOnTips.
The movement intensified when discussions emerged in U.S. President Joe Biden’s 2025 budget proposal regarding a new framework for taxing tip income. Service workers responded with widespread criticism online, emphasizing how crucial tips are to their livelihoods.
💼 Who Is Affected?
- Waiters and waitresses
- Baristas
- Hotel staff
- Hairdressers and beauticians
- Taxi drivers and delivery workers
For these professions, tips often make up a significant part of their income, and taxing this income can reduce their already limited earnings.
📈 Economic and Social Impacts
✔️ Potential Benefits:
- Increased employee motivation
- Reduced under-the-table earnings
- Improved customer satisfaction when tips go fully to workers
❌ Possible Downsides:
- Loss of government tax revenue
- Employers might rely more on tipping instead of fair wages