"Big, beautiful" tax bill contains popular break for tips

The popular no-tax-on-tips provision and another carve-out for overtime pay are both in the "big, beautiful" tax bill unveiled by House Republicans Monday.Why it matters: Exempting tipped income and overtime from taxes was a big priority for President Trump, who campaigned on the policies.The big picture: The 389-page bill released Monday afternoon is expected to kick off marathon negotiations over tax breaks and spending cuts within the GOP. Zoom in: Per the text of the bill, any cash tips received by an individual in an occupation that traditionally and customarily received tips would be eligible for the no-tax provision.Such language would presumably prevent higher-paid professionals from somehow classifying regular income as fees — think accountants, lawyers or others who charge fees for service.These tax breaks would start in 2025 and expire after 2028, and can be claimed by independent contractors, like Uber drivers, per the WSJ.Zoom out: The breaks are a key part of the president and Republicans' effort to appeal to more working-class voters.Yes, but: Overall the draft benefits wealthier Americans, keeping in place all the cuts of the 2017 tax bill, and adding some new goodies, too — like an increase in the tax break for pass-through income.The bill would raise the cap on the SALT deduction to $30,000, largely benefiting higher-income homeowners in the wealthy blue state suburbs.What's next: Lawmakers will debate the bill Tuesday afternoon.

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