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Marketplace All-in-One

The realities of No Tax on Tips and Overtime laws

Marketplace All-in-One

Marketplace

News, Business

4.8 • 1.3K Ratings

🗓️ 24 July 2025

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Republicans’ newly passed tax and spending law makes good on a promise President Trump made over and over on the campaign trail: No Tax on Tips and Overtime. But the change likely won’t have the drastic impact many workers think it will. Marketplace’s Kristin Schwab joins us on the show today to break down the nuts and bolts of how the tax breaks will work and how American workers and businesses could be affected. Plus, Kimberly’s cat Artax makes an appearance.


Here’s everything we talked about today:


Transcript

Click on a timestamp to play from that location

0:00.0

Hello, everyone, I'm Kimberly Adams.

0:08.9

Welcome back to Make Me Smart, where we make today makes sense.

0:12.1

It is Thursday, July the 24th.

0:14.5

And as regular listeners will know, I have been deep in digging into and trying to game out what's going to happen with the GOPs recently passed tax and spending law or OB3, as some of the wonks here in Washington are calling it.

0:30.3

And several of my colleagues here at Marketplace have also been looking at the many ways this law is going to impact the economy.

0:36.5

So joining me on the show today is

0:37.8

Christian Schwab, who has been reporting on the no taxes on tips and overtime provisions in the law.

0:45.0

This was a key promise that President Trump made on the campaign trail. And so Kristen actually

0:50.7

ran the numbers to try and see how this is going to play out and it's here to break it down for us. Hey, Kristen.

0:56.2

Hello. I'm so excited to de-wank the wonk.

1:00.0

De-wank the wonk. Please help us. So let's take the first piece of it. No taxes on tips. How would this tax break actually work?

1:09.5

Oh, that's a big question. Well, a couple things I want to get out there before we get into the wonky part is that the regulations have not been written around this yet.

1:19.1

So we kind of only know the basics of what these laws mean.

1:23.5

The Treasury Department actually has to get together and figure out exactly who qualifies, all of the little weeds details, and they're expected to release those rules in the next few months.

1:33.8

And then second is, I just have to apologize to everybody listening who is hoping to walk away from this with a dollar understanding of what this means for them is that I just can't do that here

1:45.9

because as we'll get into, tax law is really complicated and wonky.

1:52.0

And I want to just emphasize something that you laid out there. It's one thing to pass a piece

1:56.7

of legislation, but that really just gives us the top line. It's then up to the federal agencies

2:02.1

to actually figure out the details of how it's going to work and put the parameters in place.

2:08.0

And so we are waiting on regulations and proposed regulations from the IRS and the White House

2:15.6

to sort of put out the nuts and bolts of what this is actually going to

2:19.6

look like in terms of the literal tax code, right? Yeah. So for instance, what we do know, right,

...

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