This article is part of “Unaffordable America,” a series examining rising economic inequality in the U.S. and the policies that drive it.
It’s a tough time to be serving drinks on the Las Vegas strip. Visits are down and those who are coming are tipping less, if at all. That’s according to Sherie Cummings, who would know: She’s worked as a casino cocktail waitress for more than 20 years.
This year, though, she looked forward to a financial bright spot. She expected a bigger tax refund for her and her husband, a bartender, following President Donald Trump’s pledge of no taxes on tips. But despite the couple earning about $60,000 in tips last year, their refund wasn’t as big as she expected. That’s because of a cap, she learned, on how much in tips they could deduct.
“We were disappointed,” Cummings said. “I feel like a lot of the servers, bartenders, waitresses, tip earners were gaslit by the ‘no tax on tips.’”
“It’s a little relief, but it’s not enough relief, not at all,” she added.
Trump has repeatedly touted “no tax on tips, no tax on overtime, no tax on Social Security” as a key success of his second term since his “big, beautiful bill” passed last year. Many Americans are benefiting from the tax changes in the bill: The average refund this tax season was $3,521, about $350 more than last year, according to IRS data as of March 27. The White House has said the extra cash in people’s pockets will help boost the economy.
“People are just now talking about receiving larger refunds than they ever thought possible,” Trump said April 1 during a prime-time address focused on the war with Iran. “They are getting so much more money than they thought. That’s from the great, big, beautiful bill.”
But some middle-income households are finding the benefits are smaller than they anticipated because of how certain tax cuts are structured, according to interviews with workers, accountants and tax policy analysts. Large groups, including many railroad workers and truck drivers, are excluded from the overtime tax savings. The Social Security deduction excludes both very low and higher earners. And the tips deduction is capped at $25,000 — even for couples like Cummings and her husband who both earn a big share of their wages from tips.
Meanwhile, the highest-income households are reaping the biggest gains, with about 60% of the tax savings from Trump’s law projected to go to the top fifth of households earning more than $217,000, according to the Tax Policy Center, which does research and analysis on tax legislation. In some cases, the highest-income households will see smaller tax savings as a share of their overall income, as compared with middle-income households, but the total dollar amount in their refund check will be much more: The wealthiest households could see millions of dollars in savings with bigger tax benefits on everything from private jets to multimillion-dollar inheritances.
“Our customer base is doing well,” said Barry Shevlin, CEO of FlyUSA, which has seen sales of private jets take off following the passage of the tax law.
Under changes in the tax law, private jet buyers can deduct the full cost of the aircraft from their taxes in the year it is purchased if it is used at least half of the time for business.
“There are benefits for even taxpayers who are at lower or more moderate income levels, but as a whole, there’s certainly more tax cuts as you get higher and higher up the income levels,” said Shai Akabas, vice president of economic policy at the Bipartisan Policy Center.
How the rich are getting richer under President Trump
For decades, tax policies have disproportionately benefited the richest households that make money from stocks, businesses and real estate, which are often taxed at a lower rate than salaries or hourly wages. Some avoid paying taxes on their wealth altogether. Tax cuts enacted during Trump’s first term increased those benefits to the wealthy, and last summer’s changes made many of those tax cuts permanent.
“We have the richest Americans who control massive amounts of the country’s wealth, who are literally able to opt out of the tax system entirely. Meanwhile, anybody who earns a salary is paying a lot of taxes,” said Ray Madoff, a professor at Boston College Law School who studies tax policy.
That tax system has been one of the factors contributing to a growing divide between rich and poor in America, which is the largest it’s been in at least a generation and is growing. The wealth for the top 1% of Americans grew at nearly three times the rate of the bottom 90% in 2025, according to data from the Federal Reserve. Trump’s policies, including those at the heart of his tax cuts, could contribute to that growing divide.
For those who are getting a larger tax refund, some workers said the gains were offset by higher costs elsewhere, like gas, groceries and health care. Others are at risk of losing food assistance and health insurance benefits from new restrictions Trump and Congress included in the tax law to offset some of the lost federal revenue from the tax cuts.
Wealthy benefit
In the wealthy enclave of Boca Raton, Florida, Jordan Waxman, a managing partner at financial advisory firm Nucleus Advisors, said he’s seen only upside in the new tax bill for his roughly 100 clients with a combined net worth of $3 billion.
Many of those clients are tech entrepreneurs and business owners, whose wealth comes from stocks, real estate or other investments that are taxed at a lower rate, if at all, compared with people who earn a salary.
Among the biggest benefits he’s seen is the expansion and extension of the estate tax, which shields inheritance worth up to $15 million for an individual and $30 million for a couple from federal taxes.
Prior to the 2024 election, his clients had been racing to find ways to protect their wealth in case Democrats took control of Washington and taxed more of people’s inheritances, something several Democrats in Congress had proposed. Since the new law was passed, he said, they can breathe a sigh of relief.
“It disproportionately helps people who, let’s face it, are not in need of that much help,” Waxman said. “By and large, as a package, the highest 10% of earners, which are my clients, essentially see their incomes rise as a result of this by a few percentage points over the next five to 10 years.”
Even outside the world of the ultra-wealthy entrepreneur, high-income earners are seeing gains. A married couple with two kids, for instance, making $2 million a year would save nearly $19,000, while the same-sized family making $85,000 a year would see a tax break of $2,680 — a larger percentage of their total income, but a fraction of the benefit in real dollars, according to an analysis by the conservative-leaning Tax Foundation. One key benefit for the upper middle class is a change that allows households to deduct more of their state, local and property taxes, benefiting those who live in high-tax areas the most.
Shevlin, of FlyUSA, said his company benefited from the tax law, which included a provision called bonus depreciation that allows business owners to deduct the full cost of equipment, including a private jet, from their taxes the year it is purchased, even if it is partly used for personal trips. With Shevlin’s aircraft typically selling for around $5 million to $10 million, that tax write-off could save buyers hundreds of thousands of dollars, or even millions, on their tax bill.
“We, along with the whole industry, definitely saw a pretty significant uptick in demand in the back half last year, which we’re attributing to the 100% bonus depreciation,” Shevlin said. “We expect the same thing to happen at the end of this year.”
The company, which also provides charter jet services and manages aircraft, is projected to have $110 million in sales this year, up from $40 million in 2024, as the demand for private aircraft continues to grow, he said.
Mixed in the middle
The White House has framed the tax changes as “Working Family Tax Cuts.” Spokesman Kush Desai said in a statement that the “vast majority of working-class seniors” and the “vast majority of everyday workers” will not pay any taxes on their Social Security, tipped or overtime income.
Trump has gone further, frequently saying the new law eliminated taxes on Social Security, but that isn’t the case. Instead, the law gives older adults a $6,000 tax deduction — lowering the amount of income that is taxed. That would save the average older adult $670, the White House estimates. The benefit phases out for higher-income older adults, who still have to pay taxes on Social Security.
Anthony Winters, 65, is among those benefiting. Winters said he and his wife, who live in Ypsilanti, Michigan, had a combined retirement income of $142,000 last year and usually have to pay several thousand dollars in taxes. But this year, he got a refund of $400 from a new $6,000 tax deduction for older adults, along with a tax deduction for auto loan interest payments on American-made vehicles. Winters bought a Ford Expedition last year that qualified.
“We were really excited because we don’t have to struggle to try and pay that tax bill,” said Winters, who used the savings to buy extra gifts for his grandchildren’s birthdays and go out to dinner with his wife.
But other older adults earning less haven’t seen the same benefit. Clara Bullington, 77, said she didn’t see any change in taxes on her and her husband’s combined income of around $60,000, which mostly comes from Social Security. The couple already made too little to pay any federal income taxes.
“I thought there might be something,” said Bullington, who lives in Oregon. “I used TurboTax, and it asks all the different questions to see if I would qualify for some tax credit, but I didn’t.”
No tax on tips and overtime — sort of
The tax savings on tips and overtime have limitations as well and are more complex than Trump’s sweeping claims of “no tax on tips, no tax on overtime.” The International Brotherhood of Teamsters, which broke decades of tradition in supporting Democrats by not endorsing a presidential candidate in 2024, said tens of thousands of its members are excluded from the overtime tax break — including UPS drivers, certain airline employees and many truck drivers — because of how the law is written.
The union is advocating for federal legislation to expand the definition of overtime workers who qualify for the tax break.
Nearly 20 million taxpayers have already claimed the tax deduction for overtime pay, and more than 4.6 million taxpayers have deducted tips, Treasury Secretary Scott Bessent said during a speech to business executives on Long Island, New York, on March 30. The overtime deduction could save a worker several thousand dollars on their taxes if they are a high-earner and take the maximum deduction of $12,500, but overtime pay above that ceiling has no benefit.
Tipped workers can deduct up to $25,000; the limit is the same for an individual and for a household in which both partners earn tips, which has raised concerns for married couples working in the service industry. The deduction excludes tips that are included in a customer’s check, like when a tip is automatically added for large groups or included as a service fee. About a third of tipped workers earn so little that they pay no federal income taxes and won’t benefit from the tax break, according to estimates by the Yale Budget Lab.
In Las Vegas, where Trump pledged “no tax on tips” during his 2024 campaign and became the first Republican to win Nevada in 20 years, the Culinary Workers Union has been pushing for new federal legislation to expand how much income from tips married couples can deduct and which tips are eligible, along with extending the tax break beyond 2028, when it is set to expire.
“At the end of the day, the billionaires got their tax cuts permanent, and these are temporary. It’s basically throwing us a bone,” said Ted Pappageorge, the secretary-treasurer for the Culinary Workers Union in Las Vegas, which endorsed former Vice President Kamala Harris in 2024.
Sherie Cummings, the casino cocktail waitress, who is a member of the Culinary Workers Union, had been expecting that she and her husband wouldn’t have to pay any taxes on the $60,000 in tips they earned. Instead, they received just the $25,000 deduction.
With her refund, she’s focusing more on savings than making any new purchases given her uncertainty about the economy. Visits to Las Vegas were down 7.5% last year and tourism is off to a mixed start this year, according to the Las Vegas Convention and Visitors Authority. Cummings worries this will be another difficult year as gas prices hit $4 amid the U.S. war with Iran, though prices could drop if a recent ceasefire holds.
“I’ve never seen it like this before,” Cummings said. “They’re not spending, and they’re not tipping.”
