Tips, Overtime and Taxes on Social Security Benefits

The 2025 Republican tax bill passed. There's many horrible and harmful things in that bill, but today we'll be focusing on the changes in how tips, overtime and Social Security will be taxed (or not). Trump and the Republicans campaigned on eliminating taxes on all three. They haven't really done so, despite the propaganda email from the Social Security Administration. 

Let's start with Social Security, and how portions of it are taxed now. First of all, not all Social Security benefits are taxed. For a taxpayer filing singly, total adjusted gross income plus half of social security benefits is $25,000 or greater then up to 50% of benefits count as taxable income. If the total is greater than $34,000, then up to 85% of benefits count as taxable income. (The exact percentage is a sliding scale - the formula can be found in the Form 1040 instructions). For married couples filing jointly the thresholds are $32,000 and $44,000. So whether someone's Social Security benefits are taxable or not is based entirely on whether their combined income exceeds the levels mentioned above. 

If the formula indicates that a portion of one's benefits will be taxed, this is not deducted from their monthly benefits, but is calculated when completing the annual tax forms and determines tax liability, and therefore either the refund or amount due. 

The new tax law does not eliminate taxes on Social Security benefits. What it does is provide an additional deduction for seniors (age 65+) of $6,000 per individual ($12,000 for married filing jointly). In other words, it reduces taxable income by $6,000. This phases out for individuals earning more than $75,000 or married filing jointly over $150,000. This reduces the number of  seniors who will have their benefits taxed, but does not eliminate the tax itself. For example an individual who is still working with combined adjusted gross income and half of benefits exceeding $31,000 (the statutory threshold plus the new deduction) will have some of her Social Security benefits taxed. 

This additional deduction is only in effect for four years. It will also hasten the insolvency of the Social Security Trust Fund, since taxes on benefits go back into the Trust Fund. This additional deduction is for all seniors, not just those who are receiving Social Security benefits. 

Next up: tips

Tips are taxable income, the same as any other source of income like W-2 or 1099 remuneration. The only reason it appears to be tax-free is that many people who receive tips do not report them as income unless compelled to do so by their employer. It's virtually impossible for the Internal Revenue Service (IRS) to track every tip paid in cash (i.e. not by credit or debit card). The IRS has attempted to make it more difficult for employees to avoid paying taxes on their tip income by holding their employers accountable. Currently, in a business with tipped employees, the employees are required to report all tips to their employer who will include those tips as part of their gross income, and withhold federal and state taxes, as well as Social Security and Medicare taxes. Since it's likely that not all tips will be reported, the business is required to calculate what reported tips would be if they were 8% of sales. If total reported tips fall below 8%, the business is then required to allocate the difference between actual reported tips and 8% among all tipped employees. (Not sure if this allocation is based on sales or hours - nothing prevents an employer from having a stricter policy). This results in a tipped employee being taxed for income that they may or may not have actually received.  

The new law does not eliminate taxes on tips. What it does do is allow workers in "occupations that customarily and regularly received tips" to deduct $25,000 in tipped income from their taxable income. (This clause is supposed to prevent people who don't receive their income from tips to classifying their fees as "tips" and avoiding some taxes. With all the cuts in IRS staffing, I'm sure there will be abuses.)  All tips above $25,000 are taxable. One recurring misunderstanding is that this deduction applies only to tips paid in cash. The IRS defines "cash tips" as tips paid in cash, check, card etc. The definition of "cash tips" excludes in-kind gratuities or services in lieu of cash. This change will not benefit low income workers if their total income was already below the standard deduction, but it will reduce taxable income for many tipped workers. 

Expires after four years. 

Finally: overtime

This is similar to tips in that overtime pay is still taxable, but that a portion can be deducted from taxable income. Individuals can deduct $12,500 and married couples filing jointly can deduct $25,000. This deduction only applies to the "and a half" portion of "time and a half" paid for overtime hours. 

Expires after (you guessed it) four years. 

The bill requires that the IRS formulate regulations to govern withholding for both tips and overtime by 2026, so it remains to be seen whether paycheck withholding will take into account the tax exempt portion of tips and overtime. For the remainder of the 2025 tax year taxes will continue to be withheld as before. Taxpayers will claim the applicable deductions when filing their 2025 tax return in 2026. Since those who are claiming tip and overtime income will effectively be overpaying, I imagine that most in these categories will seeing higher than usual refunds next year. 

How will this affect state taxes? This remains to be seen. For Nebraska, taxable income is mostly based on federal adjusted gross income with a few Nebraska-specific adjustments. (Nebraska already completely exempts Social Security benefits from state income tax.) So, if these deductions reduce federal taxable income, will it also affect state taxable income? States can adjust their tax codes to compensate, or they can go along with the federal regulations; although Nebraska's legislature is out of session for the year. It looks like I got out of the Nebraska Department of Revenue just in time. FICA withholding will continue to be based on an employee's gross wages, so tips and overtime will still be subject to FICA. 

I'm sure more details will become clear in time, and if I'm missing anything I will issue updates, but that's what I know for now.

Stupid is as Stupid Does

This third post in this weekend's trilogy ties together the cultish aspects of Trumpism with "the end justifies the means" mindset of those who revel in Trump's retribution upon his enemies. 

Trump's supporters just aren't that smart.

No surprise, Trump isn't that smart either. 

A Trump supporter would immediately argue with me. They'd be angry and insulted with the label I hung on them, and incredulous that I would think that someone who was a billionaire and president of the United States wasn't, by definition, smart. I guess if defrauding the government, cheating your customers, stiffing your contractors and still bankrupting your businesses several times is smart, then I suppose I'm wrong. Trump's fortune was originally based on inheriting his father's real estate business. Fred Trump's unethical shenanigans have been well-documented, and his ill-gotten gains should have gotten him thrown in prison for fraud. Donald took over the family business by screwing over his siblings and several times almost lost it all. It's been said that if he simply put his inheritance into a money market fund he'd have a fortune many times larger than what he supposedly has now. It's no secret that prior to his deification as a business god on The Apprentice Trump ran business after business into the ground, bankrupting several casinos and losing millions on bad real estate deals. If he can be considered smart in any category, it's his choice of smart lawyers and accountants. Even when businesses he ran went belly-up, he managed to secure a paycheck for himself. Once The Apprentice created his reputation as a consummate deal-maker, banks fell over each other to loan him money, even when he became a serial defaulter. He became too big to fail. He was obviously not a good businessman, but his supporters were too stupid to see that. 

Once in office Trump's stupidity in the realm of government became obvious. He may have been politically aware enough to get elected by telling people what they wanted to hear, but he had no idea how things worked, whether in government, economics or international relations. One example of his willful ignorance is tariffs. He persisted in his belief that foreign governments pay tariffs and that a trade deficit meant that we were losing money. In his second term he imposed tariffs with little regard to any discernable strategic objective, and held on to his lack of understanding like a security blanket. His constant blustering about the 2% NATO spending goal was another example. Should NATO nations take on more responsibility for their own defense? Of course. But the 2% figure was not "dues" or payments where the United States was picking up the slack, but was a percentage of GNP that each NATO member was supposed to be spending on their military. Of course our percentage was higher since we had a military presence throughout the world, where most NATO members' militaries were concentrated close to home. Surely someone was attempting to correct him -- maybe not, he doesn't like to admit he's wrong. That's just two easily checked examples of him insisting on a view that isn't factual. It's not even a matter of interpretation. He's just wrong. 

Which brings us to the stupidity of Trump supporters. 

Most of what Trump says can be easily checked. Referring to my examples in the previous paragraph, they will celebrate as a "win" Trump's actions on tariffs when high school level economics will debunk everything he says. His ramblings about NATO spending can be checked with a 20 second Google search. They high-five each other over Trump victories that didn't happen. How many MAGA folks think the current budget bill eliminates taxes on Social Security and tips? (Spoiler alert: it doesn't -- it does contain some new deductions that are supposed to balance out those taxes). How many Trumpists believe that Trump brought peace to Israel and Iran after dropping bombs on Iran? 

Trump lies. Of course his apologists will either deny that he's lying, or will claim that all politicians lie, so it's no big deal that Trump does. Usually they just ignore the lie and engage in some "whataboutism" and point out some lie that a Democrat supposedly told. Sometimes the lie is so obviously transparent, so obviously a lie, so easily checkable, that anyone who believes it has to truly be stupid. I sometimes see posts or tweets doing a victory lap about some supposed Trump accomplishments and think "None of that happened". Do Trump voters not have internet access? Or are they just stupid? To be clear, I'm not talking about whether a particular policy is good or bad, or that I disagree with projected results, but whether or not something actually happened! 

I'm sure that Trump supporters believe  that they are very smart and discerning. The evidence would suggest otherwise.

Hail Caesar

Yes, it's a cult, as I have said many times, but there are aspects of Trump's agenda where he has been consistent about his intentions, and his supporters have been consistently for those policies. Unlike his changeable war vs. peace policies, or his view of the stock market -- these policies were no surprise. One of them is immigration.

There's no serious argument being made that our immigration and border security was "just fine" under President Biden, or for that matter under any previous president. People are highly motivated to leave the dangerous situations in their home countries, and they're going to come here. If the hoops are too high, too numerous, too expensive, they're going to find ways to come here outside the system. Instead of finding ways to balance controlling the border with expediting an immigrant's request to stay here, Trump's simplistic answer was to "close the border" and attempt to deport all non-citizens, whether they were here legally or not. A large percentage of his supporters were in favor of this before voting for him, and are still in favor of it now that they see how it's being carried out. 

Deporting people who are here illegally is perfectly legal. An argument can be made that they took a chance by entering illegally or overstaying their visa and that they brought the situation upon themselves. Of course, this isn't the moral, or even practical argument, whereby many people who do not have legal status have been contributing members of their communities for decades, working hard, paying taxes and are indistinguishable from anyone who was born here. The legal vs. illegal absolutists, however, are not interested in morality, they come down firmly on the side of the law, and have no sympathy for those who are breaking it, no matter the mitigating circumstances.  You don't have to be a racist to hold this position, but there is considerable overlap between racists and law and order absolutists on this issue. But are they really concerned about following the law?

Of course the fact that they voted for a convicted felon who was under indictment for more serious crimes than the one he was convicted for -- who saw all his legal troubles go away after being elected -- cast doubt upon their respect for the law. The methods that the administration is using to deport non-citizens (and in some cases, citizens) is itself illegal. Contrary to what Trump would have us believe, not every person being deported is here illegally. Most of the people who have been detained by Immigration and Customs Enforcement (ICE) have had some kind of legal status which allowed them to remain here. Some were awaiting adjudication of their asylum claims, others were permitted to stay under a program called Temporary Protected Status. Even Permanent Legal Residents (holders of Green Cards) have been detained and deported. ICE is picking up legal residents as they reported for their annual ICE check-in, or at the courthouse where their asylum claim was being heard. Few if any of these people are receiving any kind of due process before being disappeared into an ICE facility. None of this is legal but the Trump supporters don't care. All they care about is that deportations are being done, that Trump's agenda is being carried out, and legality is irrelevant. 

The whole "Department of Government Efficiency" (DOGE) purge is another example. Trump supporters tend to believe that Diversity, Equity and Inclusion (DEI) initiatives are discriminatory against white people and are a waste of taxpayer money. It was no surprise that DOGE targeted these programs as part of their assault on government. There's certainly arguments to be made that these programs as well as foreign aid and numerous other programs shouldn't be taxpayer funded. However, all of these expenditures, all of these gutted agencies were established and funded by law. Trump has embarked upon a mission to unilaterally remake government. The role of the president is to implement and execute the law, not to decide what the law is. But is the Trump base concerned about the Constitution being ignored? It sure doesn't seem that way. 

The political philosophy of the Trump base is evidently "the end justifies the means". They are willing to abandon the law, the constitution, and democracy in order to see Trump achieve his goals. 

Still A Cult

The Trump Cult. I've written about it before, and I'll write about it again. It offends those who are part of it. But every day I find new reasons to believe that Trumpism is indeed a cult, no different than any religious cult you care to name. 

Cults share several common characteristics. The most obvious is that a cult possesses a charismatic leader. Let's not get confused about what "charismatic" means. It doesn't mean "likeable", and certainly doesn't mean in possession of any of the traditional leadership abilities. In this context it means that the leader has great confidence, despite any evidence to the contrary, that he is always right, and has all the answers. He is somehow able to convince his followers that this true. This is manifestly true of Trump. How many times has he uttered some version of "I alone can fix it"? When pressed for a rationale for his actions, or for any basis for his plans and policies, he often answers with some variation of "because I know best". And his followers accept that answer. 

One of the clearest indicators that Trumpism is a cult is how quickly his followers pivot to a new position when Trump changes his mind about something. During the 2024 campaign the most common rationale Trump voters gave for supporting him was that they thought he would be better for the economy. They pointed to low inflation during Trump's first term compared to the high inflation of the first half of Biden's term, conveniently forgetting the economic chaos during Trump's last year in his first term. Democrats, including myself, pointed out how the 2021-2022 inflation was largely due to factors outside of a president's control (with some of the causes originating during Trump's tenure). Attempts to explain this to Trump voters got no traction -- they usually just repeated their position that Biden caused inflation. But when Trump was elected and his promise of not only ending inflation (which had by this time receded to normal levels) but rolling back prices had now come due, he said that it "was hard" and that there was little a president could do to control prices. And his people barely blinked before reciting the new mantra. 

Trump Cultists' acceptance of Trump's view of "the stock market". During Trump's first term the various methods of tracking stock market activity showed a steady increase in value, resulting a "record high" around every month. Trump and his followers ignored the fact that the trend simply followed the trend that had begun in the Obama administration, but claimed that this was evidence of how great the "Trump economy" was. When the trend continued into Biden's term, Trumpists generally ignored the stock market, until, following Trump's re-election, he claimed that the newest record high was due to anticipation of his soon-to-be second term. Not content to spew a little bit of nonsense, when the stock market fluctuated and lost value in the wake of his nonsensical and inconsistent tariff "policy", suddenly it was "Biden's stock market", or the stock market wasn't a reliable gauge of the strength of the economy. Now, since Trump stopped talking about tariffs and has paused just about all of them, the stock market has steadied and we're seeing record highs again. And once again, Trump is claiming the stock market as his, as are his sycophants. And none of them see the contradiction in any of these statements. 

One of the few Trump positions that I agreed with was his pledge to end "forever wars". He was very much against foreign involvement when he was campaigning. During his second campaign he doubled down on this, even though "not starting any new wars" didn't prevent him using the military to bomb Syria, assassinate an Iranian general, and keep us mired in Afghanistan. With his eye on a second term he made no secret that he wanted us to end our support for Ukraine in its war with Russia, claiming that, the consummate deal maker that he was, he could end the war in 24 hours -- even before he took office. We all know that that did not happen, yet his cult seems to have no problem with that. Just as the followers of the "peace president" suddenly became concerned about an Iranian nuclear weapons program and were all for a war with Iran when just a few weeks before were against any foreign military involvement. 

It's no secret that Trump desperately wants a Nobel Peace Prize. It galls him that President Obama received one (although I have no idea why they gave it to him) and his constantly hinting that he should be so honored. He is always on the lookout for conflicts where he can insert himself and claim to have solved. But he failed to get a result in the Russia-Ukraine war. He failed to get a result in Israel's destruction in Gaza. He exaggerated his role in India's and Pakistan's latest saber rattling. Who knows if he had anything of substance to contribute to the paper cease fire between Rwanda and the Democratic Republic of Congo -- which apparently has already ceased to cease. Trump's cultists take Trump's claims at face value, even when it's obvious that it's not factual. Let's not forget that the peace loving, noninterventionist MAGA clan had no trouble morphing into cheerleaders for dropping bombs on another country in someone else's war, and accepting Trump's claim to be a peacemaker as the dust from the airstrike that he ordered had yet to settle. 

One of Trump's most insidious goals was to undermine any trust in mainstream media. I won't try to claim that legacy media always gets it right or are never biased. But Trump has succeeded in convincing his cult that mainstream media is totally biased against him and prints or broadcast virtually all negatives about him. He has conveniently taken the organizations that have the experience and resources to shine a light on his words and actions out of the game. Replacing them for Trumpists are a spider web of podcasters and bloggers who are Trump cultists themselves. Any media coverage that isn't backing up whatever Trump is doing is suspect in their eyes -- and usually just assumed to be lies. 

Finally there's the politicians and the billionaire class. Many of them know that Trump lies, and that his "policies" are at best the ramblings of a lunatic. The politicians also know that due to his cultish influence over his followers, he can easily end the political career of anyone who stands against him. Wealthy business owners know that cozying up to him will make them more money. Both categories know that opposing Trump has a cost that they're not willing to pay and they enable his actions. 

What's ironic is that the Trumpists think that we're the cultists. They call us deluded. They call us deranged. They say opposition to Trump means we hate America.

They're willing to cheer on the flowering of authoritarianism.

Stolen Election?

In the lead up to the 2020 presidential election, Trump began his mission to undermine voter confidence in election results early. Months before the first votes were cast he was calling the election rigged, claiming that the only way he could lose would be if the election were somehow stolen. When results started coming in on Election Day evening indicating that he would lose, he doubled down, refusing to concede and embarked on a three month crusade to overturn the results. He and his supporters cited what they thought were anomalies, and threw around accusations that the voting machines were programmed to change votes. A recurring theme was that neither Trump nor his cult thought it was possible that Biden, who campaigned virtually for much of the year, had the support to beat Trump. To this day, Trump has never admitted that he legitimately lost to Joe Biden. 

Fast forward four years and Trump comes back and defeats Vice President Kamala Harris. Harris concedes and Trump is inaugurated a second time on January 20, 2025. There is no "Stop the Steal" movement spurred on by Biden and Harris, no one storms the Capitol, Biden attends Trump's inauguration and life goes on. Except...

...many Democrats and other progressives begin to claim that Harris "actually" won the election and that it was somehow stolen by Trump with the help of Elon Musk and other tech bros. This was not something originating with the Democratic National Committee (DNC) or with elected Democrats, but was more of a grass-roots phenomenon. A Substack article by This Will Hold lays out some technical information as well as some of the names involved in changes to the vote tabulation software and Dissent in Bloom points to some irregularities in Rockland County New York. You can read these articles yourself and see if you're convinced that the information that we currently know (or think we know) means that the election was stolen and that Harris won. I don't think that it does. Here are a few supposed red flags from This Will Hold:

"Data that makes no statistical sense. A clean sweep in all seven swing states.
The fall of the Blue Wall. Eighty-eight counties flipped red—not one flipped blue.
Every victory landed just under the threshold that would trigger an automatic recount. Donald Trump outperformed expectations in down-ballot races with margins never before seen—while Kamala Harris simultaneously underperformed in those exact same areas."

If one were to accept these results at face value—Donald Trump, a 34-count convicted felon, supposedly outperformed Ronald Reagan.

This sounds very similar to some of what the Trumpists were saying in 2020 when "bellwether" counties unusually didn't predict the winner. Whoever crafted the statement that I quoted seems blissfully unaware of what independents and fence-sitters were thinking. They have apparently underestimated just how much the high inflation of 2020-2022 hurt the Democrats -- how many people turned a blind eye to Trump's negatives while convincing themselves that he was better for the economy. How the chaos of Biden's withdrawal from the general election and Harris' anointing as successor turned off persuadable people. How Biden's paralysis on immigration and Harris' guilt by association swung many people to Trump's side. Let's not forget that for many people, Trump's felony convictions are a non-issue -- they think it's a politically inspired "witch hunt". 

Do I think it's possible that our elections were subverted and stolen in the way that is suggested? Sure, anything is possible. Do I think that speculating about scenarios that might be plausible make it so? Absolutely not. This is what the paranoia of right wing podcasters engendered after the 2020 elections. Fantasize about what could've happened and then make the leap to it absolutely did happen with barely a break for lunch. Plausibility does not equate to certainty. Do I think these allegations merit an investigation? Absolutely. Do I think that blog posts suffice as investigations? Nope. 

What thinking like this does is further erode confidence in our elections and discourages civic engagement. If you really believe that one side has made it impossible for them to lose, why even bother voting. 

Department of Government Chaos

It's no longer even remotely arguable that the inaptly named "Department of Government Efficiency" (DOGE) has not achieved its mission. 

It's mission, as laid out my Trump and Musk, was to root out not only government inefficiency, but waste and corruption. The original goal was to cut $2 trillion from the budget. This was, on the face of it, a ridiculous target. The total budget for 2024 was around $6.9 trillion, so they were claiming that they could easily trim 29% of government spending simply by making government more efficient and less wasteful, and by identifying corruption. It didn't take long for the target to be reduced to $1 trillion. According to DOGE's own website, they have made close to $150 billion in cuts, which sounds like a lot, but is only around 2.2% of annual budgeted expenditures. Even that $150 billion number is highly suspect. There are numerous claims of savings that involve contracts that had already been cancelled, counting expenditures that are already set to expire, and making ill-informed guesses about expenditures that may not even happen. Over 60% of the alleged savings contain no details -- so probably not real. 

The goal of identifying and eliminating corruption, no matter how you define it and how you count it, simply has not happened. We have a president who has no problem accusing people of imaginary crimes. Do we really think that any actual corruption that had been unearthed wouldn't have resulted in highly publicized "perp walks" led by the increasingly misnamed Department of Justice? What about waste? I have no problem believing that there is a lot of waste in the federal government. But how has waste been defined? Apparently the Trump regime definition is "anything that they don't like". Any Diversity, Equity and Inclusion programs and the employees associated with those initiatives are being classified as wasteful. From a policy perspective, an administration has the right to decide what they will prioritize, but claiming that a whole category of government programs, approved and funded by Congress (and signed by the president) is wasteful is disingenuous. 

Then there is "efficiency" -- it's right there in the name. To make something efficient you look at how you're doing it. Are there superfluous steps? Are there unneeded handoffs? Is the procedure unnecessarily complex? You then trim the process down to the elements that get you to the intended result. This might involve cutting staff. Although the typical businessman's knee-jerk response is almost always to cut payroll, which usually results in bad customer (or in this case, taxpayer) service. DOGE has gone through various departments and cut staff indiscriminately, while the core statutory requirements of the department are unchanged. Sounds like a recipe for inefficiency to me. 

All of this chaos, without any significant, or even insignificant savings. (And I'm not even getting into the Constitutional issues here). 

Trump, without any thought, had deputized someone with no knowledge of how government works to essentially remake the entire government. Should we be surprised at the chaotic results?

Congressional Creative Accounting

We're at a place where the only meaningful check on Trump's influence in Congress is fiscal conservatives (yes, they still exist), Tea Party types who want to make the Trumpublican budget worse for lower income Americans by cutting even more social programs. 

I briefly addressed the book-cooking end run around the filibuster in Nobody Likes the Filibuster Until They Do, but I didn't see much about it in the mainstream media until Ezra Klein's New York Times podcast from the other day. Here's a quote from the transcript of the podcast:

But let’s not fall for dumb budget tricks. The bill is full of tax cuts the Republicans have slapped expiration dates on. The way it’s written right now, it wipes out taxes on overtime and tips and car loans, but only for four years. That will all expire in 2028. But we know they have no intention of allowing those tax cuts to expire. They want to run in 2028 on the fear that Democrats will let them expire.

Republicans use this trick a lot. If you look back at those 2017 tax cuts from Donald Trump’s first term, they used the same gimmick. And in this very bill, Republicans are canceling all those expiration dates.

I’d used the old “Fool me once” line, but I wasn’t fooled on this last time, and I’m not going to pretend to be fooled on it this time. But I do think it’s at least a little bit funny that the Republicans want budgetary credit for using that expiring tax-cut trick in the very same bill in which they’re also deleting their last set of expiration dates. One thing you’ll never hear me say about Donald Trump’s Republican Party is that it lacks chutzpah.

According to the Committee for a Responsible Federal Budget — Washington’s saddest advocacy group — if you take seriously the permanence the Republicans are actually seeking, the Big Budget Bomb will add about $5 trillion to the debt over the next decade. That is an insane number.

Do you remember when Trump promised to balance the budget?

I remember very clearly that the 2017 "tax cuts", which disproportionally benefitted corporations and wealthy Americans, were only able to pass due to creative accounting. They were required, by Senate rules, to demonstrate that the budget would be not add to the deficit over a ten year period. If the proposed tax changes added to the deficit the Democrats would be able to filibuster. The bill, as originally written would add to the deficit. The Republicans swerved around this rule by having the changes expire in eight years, making them revenue neutral over ten years. 

We're in the eighth year right now. 

So, in Congressional pretend-land, we're supposed to forget that the whole scenario that allowed the 2017 tax changes to take place, the thing that would keep the changes from causing the budget deficit and national debt to balloon, depended on these tax cuts expiring this year. They want us to view returning to pre-2017 levels as a tax increase while simultaneously seeing extending the current levels as a tax cut. 

Since the 2017 trick worked so well, they're trying it again, and since they're running the show (again) it will succeed. The current bill, as noted in the Ezra Klein quote above, is full of expiration dates in order to (1) Neuter the Democrats ability to filibuster and (2) Use some sleight of hand to make it seem like it's fiscally responsible. Does anyone believe that Republicans won't do everything in their power to extend the expiring cuts once again? Now it's much more blatantly partisan, with the so-called expiration dates timed to coincide with the 2028 presidential election season, designed to effectively dare the Democrats to vote against extension, making them look like they're against the working class. 

Speaking of Congressional magic tricks, the big items that are designed to fool non-billionaires, in addition to expiring in three years, aren't what they're cracked up to be. 

Elimination of taxes on Social Security benefits:

Currently, Social Security benefits are partially taxable if your adjusted gross income plus half of your benefits exceed a certain amount. This could result in up to 85% of one's benefits being taxable. This mainly applies to people who have started receiving benefits while still working, or if one spouse is receiving benefits while the other is working. The bill as currently written does not eliminate taxes on Social Security. It adds an extra standard deduction for seniors of $2,000 ($4,000 for married filing jointly). How this would affect any specific taxpayer would depend on how much their income plus benefits exceeds the cutoff. It effectively lowers taxable income by $4,000. (Adding actual elimination of taxability of a portion of Social Security benefits to the budget would cause it to be ineligible for reconciliation and therefore subject to a filibuster)

Elimination of taxes on tips: 

Before diving into this, let's clear up some misconceptions. It doesn't apply only to cash. "Cash tips" as defined in the Internal Revenue tax code include cash, credit/debit cards and checks. The bill as written intends to prevent people involved in businesses that typically do not rely on tips from reclassifying their income as tips. (That doesn't mean people won't try to do it, but it's not the intent). Rather than eliminating withholding taxes on tips (including FICA) the bill provides for a deduction of up to $25,000 on any reported tips. How this works in practice remains to be seen. Will servers start reporting the actual cash that they receive as tips that they haven't been previously reporting? Sure, they'll recoup (up to $25,000) any taxes they have paid over the year (less what they paid in FICA and Medicaid taxes), but their paychecks will be smaller and they won't have that under-the-table cash. This arrangement will help their future Social Security benefit calculations, but do people in general think about the future or are they focussed more on making ends meet today?

Both of the items I cited Expire at the end of 2028. 

As usual, the party that screams about fiscal responsibility doesn't hold themselves to the same standard.