Ted Cruz promotes bill to enact Trump's tax-free tips proposal

Senator Ted Cruz of Texas has introduced legislation to codify Donald Trump's proposal to eliminate federal taxes on tips, dismissing concerns from budget watchdogs that it could increase the deficit by $250 billion or even more over a decade.

Cruz, along with many other congressional Republicans, have quickly championed the idea since Trump raised it at a rally in Las Vegas on June 9. The party has made inflation under President Joe Biden a centerpiece of its November election campaign and wants to fit the challenges faced by workers who rely on tips into that narrative.

"When it comes to people earning tips, they're waiters and waitresses and barbers and hairstylists and taxi cab drivers and Uber drivers and all sorts of people that are struggling," Cruz said in an interview on Bloomberg Television's Balance of Power on Thursday. "That's going to have a big impact on millions of working men and women."

Graeme Sloan/Bloomberg

Cruz cast doubt on the projections of the nonpartisan Committee for a Responsible Federal Budget, which estimates that the tax cut could cost the federal government $250 billion over a decade or as much as $500 billion if more income is shifted to tips to avoid tax. 

He said that overall federal revenue still increased after Trump's 2017 tax cuts, though the Congressional Budget Office has estimated that just extending the portion of Trump's tax cuts that expire at the end of 2025 would cost $4.6 trillion over a decade. In addition, groups like the CRFB found that they didn't come close to paying for themselves with higher growth. 

Cruz instead said excessive spending was to blame for deficits.

The Texas senator, the top Republican on the Commerce Committee, also touted bipartisan legislation he introduced this week that would make it a federal crime to knowingly publish online non-consensual intimate images, including deepfake pornography. 

The bill would also require social media and other websites to remove the images within 48 hours of a request by a victim. Cruz said a then-14-year-old Texas girl awoke one morning to find that fake nude images of her had been posted on a social media site. He added that they remained there until his office called to complain.

"Any victim, any teenager in Texas should have the right to get those offensive and false pictures removed, and this bill will put that obligation on big tech to do that," he said.