June 10, 2025
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10:14Now PlayingA key House committee chairman warned the Senate against passing a tax bill that fails to deliver on President Donald Trump’s campaign promises to exempt tips and overtime pay from taxes.
Any Senate version of the tax package that doesn’t include the breaks would be “dead on arrival” in the House, Ways and Means Chair Jason Smith, whose committee is responsible for tax legislation, said in an interview with Bloomberg Radio and TV on Tuesday.
Several Republican senators including Thom Tillis of North Carolina and Lindsey Graham of South Carolina have expressed skepticism about the cost and economic wisdom of including the tax exemptions on tips and overtime pay in the legislation. Senators have instead called for funds to be used to make temporary business tax breaks permanent.
Such a change would a “no go” for House Republicans, Smith said.
The Senate is now considering the massive tax and spending package after it passed the House by a single vote last month. If the Senate changes the legislation, the House must approve the revised version.
Senator Josh Hawley, a populist Republican, said Trump told him Tuesday morning that tax exempt tips and overtime, as well as a tax cut for the elderly, are the most important provisions in the bill.
House Speaker Mike Johnson also has urged senators not to remove or scale back provisions in the legislation that exempt tips and overtime pay from income tax through 2028.
“This is an important promise for us to keep,” Johnson told reporters earlier Tuesday.
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