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What Trump’s Sweeping Domestic Policy Law Means for American Workers

UNITED STATES, JUL 09 – The bipartisan bill raises the child tax credit to $2,200 but cuts Medicaid by $1 trillion and reduces SNAP funding, shifting more costs to states and imposing work requirements.

  • President Donald Trump signed a major tax and spending bill in Washington on July 4, 2025, that included a no-income-tax deduction on tips and overtime for workers.
  • The bill delivers on Trump's campaign promise by allowing workers earning under $150,000 to deduct up to $25,000 in tips and $12,500 in overtime from federal income taxes starting in the 2025 tax year.
  • While millions of tipped workers, including about 4 million in 2023, stand to keep more money, some industry groups and economists warn the law could have unintended effects on wages and the labor market.
  • Ignacio Ayala, a restaurant owner, said it will help many workers who rely on tips but expressed uncertainty about how the changes will ultimately play out in practice.
  • This no-tax-on-tips provision will expire at the end of 2028 unless Congress decides to renew it, and the law also includes cuts to Medicaid and SNAP programs affecting millions of families.
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Classic City News broke the news in on Monday, July 7, 2025.
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