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one fair wage
This Tax Season Proved 'No Tax on Tips' Was Never for Workers
Cutting taxes on some tips for some workers is not a solution. Raising wages—and ending the subminimum wage—is.
Apr 18, 2026
During the election, Donald Trump boasted about lowering taxes for working Americans with his “no tax on tips” plan. This tax season, millions of Americans found out it was a scam.
You have to earn money for tax cuts to affect you. A tax deduction only helps if you owe taxes—and most tipped workers earn so little that they barely do. Two-thirds of tipped workers will not even earn enough to benefit. Zero minus zero is still zero. The vast majority of these tax cuts go to the wealthiest taxpayers.
For the workers this policy was supposed to help, the results are already clear.
Take Sherie Cummings, who has poured drinks on the Las Vegas Strip for 20 years. Sherie and her husband, also a bartender, earned $60,000 in tips last year. They expected the full deduction the president promised. They got $25,000 of it. The cap.
Thirteen million tipped workers do not need a tax deduction. They need a raise.
For private jet buyers, the same law delivered something different. Full write-offs on aircraft worth $5 to $10 million. And that write-off is permanent. The tips deduction expires in 2028. The Tax Policy Center projects that 60% of the savings from this law will flow to the top fifth of households—those earning more than $217,000 a year. The wealthiest will save millions. Sherie Cummings is putting her refund into savings because she is afraid of what comes next.
For working people, the real problem was never the tax code. It is wages. The federal subminimum wage for tipped workers has been $2.13 an hour since 1991. It was locked there permanently in 1996 by the National Restaurant Association—what we call “the other NRA.” They spent $2.9 million on federal lobbying in 2020 alone to make sure it stayed there. Which is why tipped workers earn a median income of $15,198 a year. Thirty-seven percent of the national median. Which is why they rely on food stamps at nearly double the rate of other workers. And because workers depend on tips from customers to survive, they put up with what no one should have to. Seventy-one percent of women in the industry report sexual harassment. In subminimum wage states, the rate is double what it is in states that require a full minimum wage with tips on top.
Seven states already require a full minimum wage with tips on top: California, Oregon, Washington, Nevada, Minnesota, Montana, Alaska. It is called One Fair Wage. The restaurant lobby warns that tips would disappear, that restaurants would close, that jobs would vanish. These are scare tactics. The seven states prove them wrong. Tips are the same or higher. Restaurant employment grows faster. Small business growth rates match or beat subminimum wage states.
And restaurant workers have organized and fought for years and won One Fair Wage in Washington, DC, Chicago, and Michigan. The restaurant lobby has fought to block and roll back these wins—in Michigan, they are still trying. But workers keep going. And even where implementation is partial, the numbers are in. DC set an all-time restaurant employment record. Tips grew. Chicago saw more than 850 new restaurant licenses and the fastest pay growth in the country.
Cutting taxes on some tips for some workers is not a solution. Raising wages—and ending the subminimum wage—is. That is why more than 100 labor, community, and civil rights organizations have come together as the Living Wage For All coalition. The fight: Raise the minimum wage to meet the cost of living and end all subminimum wages. In every state. For every worker. Campaigns are active in eight states. Workers have already won. And they will keep winning.
Thirteen million tipped workers do not need a tax deduction. They need a raise. Every shift. Every paycheck. Every year.
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DoorDash Grandma Delivering to Trump Doesn't Change That No Tax on Tips Is a 'Deceptive Ploy'
"The fact that a term like 'DoorDash grandma' exists should be a wake-up call," said the head of One Fair Wage. "It should never exist in the first place."
Apr 13, 2026
While "DoorDash Grandma" made the company's first food delivery to the White House on Monday to promote President Donald Trump's "no tax on tips" policy, the awkward encounter outside the Oval Office not only highlighted critiques of that provision of the GOP budget package but also sparked calls for a living wage and universal healthcare.
"A perfect image of the Trump era: A grandmother has to work at DoorDash in order to get by, while the president decorates his office in gold accent pieces," said Democratic strategist Max Burns, sharing a photo of the delivery on social media.
Saru Jayaraman, president of worker advocacy group One Fair Wage, told Common Dreams that "it's sad, and it's a sign of a failing society—not something to celebrate or turn into a photo op. We've normalized an economy where older people are pushed into gig work just to survive. The fact that a term like 'DoorDash grandma' exists should be a wake-up call. It should never exist in the first place."
"Corporations are paying poverty wages while policymakers offer Band-Aid solutions like 'no tax on tips' instead of paying a living wage," Jayaraman continued. "At the same time, cuts to Medicaid and food assistance are stripping away the safety net workers rely on to get by. This is all pushing people into greater dependence on tips and unstable income. Workers don't need gimmicks—they need living wages, corporate accountability, and real economic security."
Trump and then-Vice President Kamala Harris latched on to the no tax on tips policy during the 2024 campaign, despite warnings from economists and others that it is a "deceptive ploy," as the Economic Policy Institute's David Cooper and Nina Mast put it last year.
"It does nothing to address the low wages, income instability, wage theft, and abuse tipped workers already face," the pair reiterated in February. "Instead, it may undermine efforts to raise tipped minimum wages, push more workers into tipped jobs, increase workloads, and prompt customers to tip less if they believe tipped workers receive special tax treatment."
After related legislation passed the US Senate last year, Jayaraman said that "for all the bipartisan celebration, this bill is a distraction from the real fight... If Democrats want to offer a true alternative, they need to say it loud and clear: It's time to raise the minimum wage and end the subminimum wage once and for all."
A no tax on tips policy was ultimately included in Republicans' so-called One Big Beautiful Bill Act—which, as a recent Institute on Taxation and Economic Policy analysis details, featured tax breaks that primarily benefited wealthy individuals and corporations while cutting programs that serve working families, such as Medicaid and the Supplemental Nutrition Assistance Program.
Specifically, last year's GOP budget package established a temporary federal income tax deduction for tips, capped at $25,000 per year, through 2028. In a February report, the libertarian Cato Institute estimated that "the roughly 3% of tax returns projected to claim the tips deduction in 2026 will receive an average tax cut of about $1,370," and "as a share of after-tax income, the tips deduction broadly benefits those in the middle of the income distribution."
"These provisions also add to the already large number of tax deductions and credits that shield vastly uneven amounts of income from taxation based on family size and childcare arrangements," the Cato report notes. "In addition to the income limits, the tips deduction is only available to occupations that 'customarily and regularly received tips' before 2025."
Sharon Simmons, who wore a red shirt that read "DoorDash Grandma" while delivering McDonald's bags at the White House on Monday, told Trump that she benefited from the policy. In a statement, the company identified her as an Arkansas-based grandmother of 10 who "started dashing in 2022 to earn income while keeping control of her schedule."
During the delivery, the president asked Simmons whether she voted for him—"uh, maybe," she said—and about banning transgender women from competing in sports in line with their gender identity, on which she said she did not have an opinion.
Labor reporter Michael Sainato pointed out that Simmons previously lived in Nevada and advocated for the no tax on tips policy to the US House Ways and Means Committee last year. He also questioned her comments to Trump about having saved over $11,000 on her most recent tax bill.
The dasher claims "$11,000 in savings by not having to claim." You still have to claim tipsYou can only deduct up to $25k in tips, so $11k in savings off of one year didn't happenThe tax savings are actually minimal taxpolicycenter.org/fiscal-facts...
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— Michael Sainato (@msainato.bsky.social) April 13, 2026 at 3:39 PM
While Trump staff and congressional Republicans shared footage of Simmons' delivery to Trump to promote the budget package provision in the lead-up to tax day, US Rep. Dina Titus (D-Nev.) stressed on social media Monday that the president's "policy is severely limited and sunsets in 2028."
"We must make it permanent and increase the minimum wage to support our nontipped workers like childcare, fast food, and retail. We can do both by passing my LIFT Act," said Titus, whose Labor Income Fairness and Transparency Act is backed by One Fair Wage.
"Cutting taxes on tips might make for a good sound bite, but on its own, it's a hollow fix that ignores the real crisis: Wages so low that two-thirds of restaurant workers don't even earn enough to pay federal income taxes," Jayaraman said last year, when Titus introduced the bill. "In a time of skyrocketing costs, workers are drowning and need more than political gimmicks—they need a raise."
"Tips should be a bonus, not a substitute for a living wage," she argued. "By ending all subminimum wages and requiring that all workers be paid a full livable wage with tips on top, the LIFT Act addresses what working people need most: a fair wage, a level playing field, and the dignity that comes with being able to provide for their families."
Some observers on Monday also noted Simmons' appearance on Fox News, during which she acknowledged the financial burden of her husband's 2025 cancer diagnosis.
"Grandma shouldn't have to rely on DoorDash tips to make up for Republicans doubling the cost of healthcare," declared Democrats on the House Ways and Means Committee, sharing a clip of the interview on social media.
Melanie D'Arrigo, executive director of Campaign for New York Health, which advocates for universal, single-payer healthcare, emphasized that "'no tax on tips' does not make up for the fact that no one can afford healthcare."
Historian Timothy Snyder said, "So let’s have universal healthcare and help people live in dignity."
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'A National Disgrace': 19 States to Raise Minimum Wage But Federal Rate Stuck at $7.25
One Fair Wage noted that "tipped workers can still legally be paid as little as $2.13 an hour, a system advocates describe as a direct legacy of slavery."
Dec 31, 2025
Over a third of US states are set to raise their minimum hourly wage in 2026, but worker advocates including Sen. Bernie Sanders on Wednesday decried a federal minimum wage that's remained at $7.25 since 2009—and just $2.13 an hour for tipped workers for over three decades.
Minimum wage hikes are set to go into effect in 19 states on Thursday: Arizona, California, Colorado, Connecticut, Hawaii, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington.
Increases range from 28 cents in Minnesota to $2 in Hawaii, with an average hike of 67 cents across all 19 states. More than 8.3 million workers will benefit from the increases, according to the Economic Policy Institute (EPI). The mean minimum wage in those 19 states will rise to $14.57 in 2026, up from $13.90 this year.
Three more states—Alaska, Florida, and Oregon—plus Washington, DC are scheduled to raise their minimum wages later in 2026.
In addition to the state hikes, nearly 50 counties and municipalities plan to raise their minimum wages in the coming year, according to the National Employment Law Project (NELP). These include San Diego, California—where the minimum wage for hospitality workers is set to rise to $25 an hour by 2030—and Portland, Maine, where all workers will earn at least $19 by 2028.
However, the federal minimum wage remains at $7.25, and the subminimum rate for tipped workers is $2.13, where it's been since 1991—and has lost more than half its purchasing power since then.
The federal minimum wage has stayed at $7.25 since 2009. In 2026, workers in 19 states and 49 cities and counties an increase. Alabama’s rate will stay at $7.25. 🔗 https://t.co/mrGfPAKba3 pic.twitter.com/EsokVIc6KP
— AL.com (@aldotcom) December 31, 2025
"Tipped workers can still legally be paid as little as $2.13 an hour, a system advocates describe as a direct legacy of slavery," the advocacy group One Fair Wage (OFW) said in a statement Tuesday.
Sanders (I-Vt.) said on social media on the eve of the hikes: "Congratulations to the 19 states raising the minimum wage in 2026. But let’s be clear: A $7.25 federal minimum wage is a national disgrace. No one who works full time should live in poverty. We must keep fighting to guarantee all workers a living wage—not starvation wages."
Yannet Lathrop, NELP's senior researcher and policy analyst, said earlier this month that "the upcoming minimum wage increases are incremental and won’t magically turn severely underpaid jobs into living-wage jobs, but they do offer a bit of relief at a time when every dollar matters for people."
“The bigger picture is that raising the minimum wage is just one piece of a much larger fight for a good jobs economy rooted in living wages and good benefits for every working person," Lathrop added. "That’s where we need to get to."
Numerous experts note that neither $7.25, nor even $15 an hour, is a livable wage anywhere in the United States.
"The gap between wages and real living costs is stark," OFW said. "According to the MIT Living Wage Calculator, there is no county in the United States where a worker can afford to meet basic needs on less than $25 an hour. Even in the nation’s least expensive counties, a worker with one child would need at least $33 an hour to cover essentials like rent, food, childcare, and transportation."
"Advocates argue that policies like President [Donald] Trump’s 'no tax on tips' proposal fail to address the underlying problem of poverty wages," OFW continued. "While the policy has drawn attention, they say it is a headline rather than a solution, particularly since nearly two-thirds of tipped workers do not earn enough to owe federal income taxes."
Frustrated by the long-unchanged $7.25 federal minimum wage, numerous states in recent years have let voters give themselves raises via ballot initiatives. Such measures have been successful even in some red states, including Missouri and Nebraska.
Rising minimum wages are a legacy of the union-backed #FightFor15 movement that began among striking fast-food workers in 2012. At least 20 states now have minimum wages of $15 or higher.
However, back then, "the buying power of a $15 minimum wage was substantially higher than it is today," EPI noted. "In 2025, a $15 minimum wage does not achieve economic security for working people in most of the country. This is particularly true in the highest cost-of-living cities."
In April, US senators voted down an amendment that would have raised the federal minimum wage to $17 an hour. Every Democratic and Independent upper chamber lawmaker voted in favor of the measure, while all Republicans except Sen. Josh Hawley (Mo.) rejected it.
As Trump administration and Republican policies and practices—such as passing healthcare legislation that does not include an extension of Affordable Care Act tax credits, which are set to expire on Wednesday and send premiums soaring—coupled with persistently high living costs squeeze workers, advocates say a living wage is more important than ever.
The issue is underscored by glaring income and wealth inequality in the US, as well as a roughly 285:1 CEO to worker pay gap among S&P 500 companies last year.
"Minimum wage doesn't cover the cost of living," Janae van De Kerk, an organizer with the Service Employees International Union (SEIU) Airport Workers union and Phoenix Sky Harbor International Airport employee, said in a video posted Tuesday on social media.
"Minimum wage doesn't cover the cost of living. Many of my co-workers have to choose between food on the table or health insurance" Janae, Phoenix Sky Harbor Airport service worker No one should have to make that choice.
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— Airport Workers United (@goodairports.bsky.social) December 30, 2025 at 10:34 AM
"Many of my co-workers have to choose between food on the table or health insurance, or the choice between having food and paying the electric bill," van De Kerk—who advocates a $25 hourly minimum wage—continued.
"We shouldn't have to worry about those things," she added. "We shouldn't have to stress about those things. We're willing to work and we wanna work, and we should be paid for our work."
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