FORT MYERS BEACH, Fla. — Employees working for tips on Fort Myers Beach could soon have more money in their pockets. President Donald Trump recently announced a plan during his address to Congress to eliminate taxes on tips, overtime pay, and Social Security benefits.
Watch as Fort Myers Beach Community Correspondent Anvar Ruziev speaks with culinary industry employees in Times Square:
"I'm calling for no tax on tips, no tax on overtime, and no tax on social security benefits for our great seniors," Trump said.
According to Nevada Congressman Steven Horsford, more than six million Americans depend significantly on tips for their income. Yesenia Roman, a server on Fort Myers Beach, thinks the change is good news.
"We barely get an hourly wage, and we get taxes taken out of that too, so having no tax on tips is perfect," Roman said.
Tyler Bedford, who also works in a restaurant, agrees that removing these taxes would be helpful. "I can see it adding up. After a few weeks or a month, I could notice a real difference and have more money," Bedford said.
However, a recent study from Yale’s Budget Lab suggests that fewer people might benefit from this tax change than expected. The study found that fewer than 3 percent of American families would actually get savings from a broad tax deduction on tips in 2026. Those who do benefit would save an average of $1,700, but families at the lower end of the income scale might only save around $200.
The study also says many low-income workers already pay little or no income tax, so a tip exemption wouldn't help them very much. Additionally, the report warns the proposal could increase tax avoidance, making the government lose more than $100 billion over ten years. However, limiting the exemption to certain jobs, like restaurants and hotels, could save about 40 percent of that cost.
The average income for workers relying heavily on tips is around $32,000 a year, according to Nevada Congressman Steven Horsford. He says cutting these taxes could help workers afford basic needs and prevent them from needing multiple jobs.
Despite the warnings about costs and tax avoidance, Bedford supports the policy. "I am for it; I would love to not have to pay taxes," he said.
Before any of these tax changes can happen, the proposal must first be passed by the Senate and then signed into law by President Trump.
