## House Budget Committee Passes "No Tax" Bill: Key Facts **Summary:** On May 18, 2025, the House Budget Committee narrowly passed a major tax reform bill championed by President Donald Trump and House Republicans. The legislation, often called the "Big Beautiful Bill," includes a high-profile "No Tax on Tips" provision and other sweeping tax changes. The bill now advances to a full House vote later this week. --- ## Major Provisions of the Bill - **No Tax on Tips:** The bill eliminates federal income tax on tips, fulfilling a Trump campaign promise and directly benefiting workers in tipped professions. - **No Tax on Overtime:** Overtime pay would be exempt from federal income tax, though relatively few workers regularly earn overtime. - **Tax-Deductible Auto Loan Interest:** Interest paid on qualified passenger vehicle loans would become temporarily deductible, especially benefiting lower-income car buyers. - **Permanent 2017 Tax Cuts:** The bill makes permanent the individual and business tax cuts enacted in 2017, which were set to expire in 2025. - **Spending Cuts and Program Reforms:** The legislation includes significant cuts to federal spending, particularly to Medicaid and green energy tax incentives, though these cuts have sparked internal Republican disputes. --- ## Political Dynamics and Vote Outcome - The committee passed the bill by a narrow 17-16 margin, with all Democrats opposing. Four hardline Republicans allowed the bill to advance by voting "present" after closed-door negotiations. - The bill had previously stalled due to disagreements among Republicans over the depth of spending cuts and the removal of green energy incentives. - The measure is expected to face further debate and possible amendments before a full House vote. --- ## Economic and Fiscal Impact - **Cost and Debt:** Nonpartisan analysts estimate the bill could increase the national debt by \$3 trillion to \$5 trillion over the next decade. - **Distributional Effects:** The largest tax benefits would go to high-income earners, while the "No Tax on Tips" and auto loan provisions would offer targeted relief to lower-income workers. - **Long-Term Concerns:** Economists warn that the bill’s tax cuts far exceed spending reductions, likely worsening the federal deficit and potentially slowing economic growth over time. --- ## Notable Reactions > Thanks to @POTUS and @RepJasonSmith, millions of Dashers may soon get a tax break on their hard-earned tips... the House’s budget bill is an important step in making \#NoTaxOnTips a reality. > — DoorDash CEO Tony Xu > This bill falls profoundly short. It does not achieve what we claim it does regarding deficits. > — Rep. Chip Roy (R-TX), bill opponent --- ## What Happens Next - The bill moves to the full House of Representatives, where further debate and amendments are expected. - If passed by the House, it would proceed to the Senate for consideration. --- **In summary:** The House Budget Committee has advanced a major Republican tax bill featuring a "No Tax on Tips" provision, permanent 2017 tax cuts, and targeted tax breaks for overtime and auto loans. The bill faces significant controversy over its impact on the deficit and spending cuts, and will be debated further in the House this week.🔥60