On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBB) into law. Under OBBB, tax reductions worth trillions that were scheduled to expire in 2025 will now remain in place permanently. It also adds new breaks, including tax-free overtime pay and an extra deduction for seniors. According to the Congressional Budget Office, the measure is expected to raise federal deficits by $3.4 trillion over the next decade.
This is expected to provide direct financial relief to millions of Americans who are part of the service industry.
This bill is popular among workers, especially those who work in hospitality, but just like the overtime deduction, it isn’t technically a true tax cut but a targeted deduction that favors some groups over others.
Senator Ted Cruz of Texas, who introduced the bill along with Senator Jacky Rosen of Nevada, said, “This is about fairness. These workers are putting in long hours and living paycheck to paycheck. They deserve to keep more of what they earn.”