On the campaign trail, President Donald Trump promised to end federal taxes on tips and overtime. Democrats dismissed it as an election-year ploy to win votes, but Trump delivered on that promise when he signed the One Big Beautiful Bill Act on July 4, which eliminated taxes on tips and overtime for service and hospitality workers.
However, blue-state Democrats like New York Gov. Kathy Hochul, Illinois Gov. JB Pritzker, and Colorado Gov. Jared Polis are, in the words of Treasury Secretary Scott Bessent, “deliberately blocking their own residents” from accessing the “historic benefits” promised under the law.
“President Trump’s tax cuts bill is the most pro-worker, pro-family legislation in a generation,” Bessent said. “It puts more money directly into the pockets of hardworking Americans through No Tax on Tips for dedicated service industry staff, No Tax on Overtime for linemen and factory workers, and a new tax deduction for seniors who depend on Social Security.”
Bessent continued, “This partisan stonewalling is a direct assault on the very families and workers liberal politicians claim to champion. By denying their residents access to these important tax cuts, these governors and legislators are forcing hardworking Americans to shoulder higher state tax burdens, robbing them of the relief they deserve and exacerbating the financial squeeze on low- and middle-income households.”
Bessent demands that these holdouts conform immediately and quit punishing citizens for political spite.
“President Trump’s vision is clear: real relief for the forgotten men and women of America, certainty for businesses, and momentum for growth,” Bessent added. “The American people voted for bold change, not bureaucratic roadblocks.”
Bessent also hinted that there would be consequences for states that refuse to comply with the law.
“Treasury stands ready to work with any state committed to delivering on that promise, but we will not stand idly by as this obstructionism drags down the national recovery,” he said. “This is about fairness. This is about opportunity. And this is about putting America first, starting with the families and workers who make our economy the envy of the world.”
Bessent doubled down in a post on X, and compared Govs. Hochul, Pritzker, and Polis to the Dr. Seuss character, the Grinch.
“Courtesy of their Scrooge-like tendencies, America’s seniors, along with all workers who would benefit from No Tax on Tips and No Tax on Overtime, will be robbed of the tax relief they deserve,” he wrote. “The Christmas season should be a time of great cheer. But due to the Trump Derangement Syndrome of these Governors and other radical leftists, too many low- and middle-income households will receive nothing but coal in their state tax stockings.”
Thanks to @POTUS, ‘tis the season to be jolly – unless you’re a taxpayer in New York, Colorado, Illinois, or the District of Columbia.
For millions of hardworking Americans, @GovKathyHochul, @GovofCO @jaredpolis, and @GovPritzker are The Grinches Who Stole Christmas.
Courtesy… pic.twitter.com/eVtKYcHc4w
— Treasury Secretary Scott Bessent (@SecScottBessent) December 10, 2025
Ironically, Trump wasn’t the only one who wanted to relieve service and hospitality workers of paying taxes on tips and overtime. Two months after he proposed his No Tax on Tips plan, Kamala Harris pitched her own version of the idea at a rally in Las Vegas in August 202. She pledged, “It is my promise to everyone here when I am president, we will continue our fighting for working families of America including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.”
While many Democrats were already on the record opposing Trump’s plan, Harris’s proposal had the backing of both of Nevada’s Democratic U.S. Senators, Jacky Rosen and Catherine Cortez Masto. Former White House press secretary Karine Jean-Pierre even said that if such a proposal to eliminate taxes on tips had passed Congress, Joe Biden would have signed it.
Trump, however, called Harris out immediately for stealing his proposal.
“Kamala Harris, whose ‘Honeymoon’ period is ENDING, and is starting to get hammered in the Polls, just copied my NO TAXES ON TIPS Policy,” Trump wrote in a post on Truth Social at the time. The difference is, she won’t do it, she just wants it for Political Purposes! This was a TRUMP idea – She has no ideas, she can only steal from me. Remember, Kamala has proposed the LARGEST TAX INCREASE IN HISTORY – It won’t happen. MAKE AMERICA GREAT AGAIN!!!”
The Trump administration sees the new law as a straightforward win for workers, yet this standoff with blue states ensures the debate is far from over.
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