No Tax on Tips May Have Locked Up Silver State for GOP

No state stands to benefit from the “no tax on tips” policy in the One Big Beautiful Bill (OBBB) more than Nevada, a state dominated by the hospitality industry. In delivering on this key 2024 Trump campaign promise, Republicans may have set themselves up for a string of victories in the Silver State – and Democrats know it.

When Trump unveiled his no tax on tips proposal during a campaign stop in Las Vegas last year, many Democrats and corporate media pundits dismissed it as a gimmick that had no chance of becoming law. But as AMAC Newsline predicted at the time, it could be key for Trump (and future Republicans) in accelerating Nevada’s shift from Democrat stronghold to swing state – and possibly even friendly territory for the GOP.

Sure enough, in 2024 Trump became the first Republican presidential nominee to win Nevada since George W. Bush in 2004. On the heels of Republican Governor Joe Lombardo’s 2022 victory, it indeed seems like Nevada could be trending red. The no tax on tips policy should get a great deal of credit for that development.

Nevada has one of the highest concentrations of tipped workers in the country. According to the Bureau of Labor Statistics, the state employs more than 26 waiters and waitresses per 1,000 jobs, which is more than double the national average – and that doesn’t include bartenders, tour guides, and all the other professions that count on tips to make ends meet. Overall, roughly 25 percent of Nevada’s private-sector workforce is employed in tipped industries.

For this cohort, eliminating federal taxes on tips isn’t just another talking point. It’s a real increase to their take-home pay. These workers are disproportionately working-class, minority, and non-college-educated — the very groups Democrats claim to champion. Yet when given the chance to back real economic relief, Nevada Democrats voted no. Every member of Nevada’s congressional delegation voted against the One Big Beautiful Bill.

Democrats have long recognized the importance of appealing to tipped workers in Nevada. Former President Joe Biden notably campaigned in 2020 on ending the tipped minimum wage, a policy that would have forced employers to pay workers the full minimum wage along with tips. Cities that adopted that model, like Washington, D.C., became cautionary tales. Restaurants faced declining traffic, steeper prices, and backlash from both owners and staff.

Thankfully for Nevada workers and businesses, the Biden administration never followed through – just one among many broken promises. Trump’s approach has now delivered a win-win for Nevadans, as workers keep more of their hard-earned money without placing any additional strain on businesses.

Nevada Democrats also clearly recognize how vulnerable their vote against the no tax on tips policy makes them. Last year, Republican Senator Ted Cruz of Texas introduced the No Tax on Tips Act (S.4621), a bill that mirrored Trump’s proposal to eliminate federal income taxes on tipped wages. Shortly after introduction of the bill, Nevada Senators Catherine Cortez-Masto and Jacky Rosen – both Democrats – quietly signed on as co-sponsors, breaking with their own party.

Cruz’s bill stood no chance of ever coming up for a vote in the Democrat-controlled Senate. However, when decision time came this year on the OBBB, both Cortez-Masto and Rosen voted against no tax on tips. Nevada’s House Democrats followed suit. Reps. Dina Titus, Susie Lee, and Steven Horsford all voted against the legislation, despite representing districts where tipped labor plays a central role in the economy. Nevada’s lone congressional Republican, Mark Amodei, voted for the bill.

Those “No” votes have opened Democrats up to criticism from Republicans, who are sure to prominently display opposition to no tax on tips in attack ads next year and in future campaign cycles.

According to a recent report from Punchbowl News, Nevada Democrats are now growing nervous about that eventuality and attempting to reframe their opposition, insisting they still support the idea in principle — just not the version that became law. But in a state where paychecks are set to grow significantly under the new policy, that distinction may not resonate with voters.

Rosen just won re-election last year, while Cortez-Masto isn’t up for re-election until 2028. But Lee, Titus, and Horsford are already on the National Republican Congressional Committee’s target list. Lee faces a declared GOP challenger in video game composer Marty O’Donnell, one of several Republicans hoping to capitalize on Democrat vulnerability.

Even before Republicans embraced no tax on tips, Nevada already appeared to be shifting politically. The once-formidable political machine built by the late Sen. Harry Reid has faded as Republicans have made steady gains among working-class and Latino voters. Lombardo’s 2022 victory further eroded Democrats’ grip on power before Trump shattered it last November.

With the tax cuts now in effect and paychecks soon rising, Republicans are betting that real economic relief will outweigh political spin. Especially in a state where service work drives the economy, Trump’s tax cuts expose a growing divide between Democrat rhetoric and voting records.

It may well be that future generations look to “No Tax on Tips” as the slogan that won the Silver State for the GOP.

Sarah Katherine Sisk is a proud Hillsdale College alumna and a master’s student in economics at George Mason University. You can follow her on X @SKSisk76.