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For thousands of New Yorkers grinding through long shifts in restaurants, bars, and delivery apps, tips are not extra money, they are survival. So when talk of ‘No Tax on Tips’ started gaining traction, it hit different.
On the surface, it sounds like a win. More money in workers’ pockets. Less taken out by the government. But behind the headlines, this proposal is turning into a serious political fight that could reshape how New York funds everything from housing to public services.
And now, it is putting Kathy Hochul and Zohran Mamdani on very different sides of the conversation.
The idea is simple. Workers would no longer pay certain taxes on the tips they earn.
That means:
The concept has roots tied to messaging from Donald Trump, which is now making its way into New York’s political debate.
Supporters say it is long overdue. Critics say it is not that simple.
Governor Kathy Hochul has been leaning heavily into affordability messaging. With rising rent, food costs, and everyday expenses hitting New Yorkers hard, any policy that sounds like relief gets attention fast.
Attribution: According to state-level discussions and budget framing, Hochul has shown openness to tax relief strategies that avoid raising taxes elsewhere.
For her, ‘No Tax on Tips’ fits that narrative:
But that approach comes with trade-offs.
Here is where things get real.
Cutting taxes on tips does not just help workers. It also means the government collects less money.
Attribution: Policy estimates suggest the city could lose hundreds of millions in revenue, with figures around $200M+ annually being discussed depending on how the policy is structured.
That money normally helps fund:
So the question becomes:
If workers keep more, who fills the gap?
This is where Zohran Mamdani comes in.
Mamdani has been vocal about a very different vision for New York. His focus is on:
A policy like ‘No Tax on Tips’ moves in the opposite direction. Instead of bringing in more revenue, it cuts it.
Attribution: Based on his broader policy stance, Mamdani’s approach emphasizes generating funding for large-scale city needs rather than reducing tax streams.
That creates a clear divide:
This is not just a political argument. It is personal for a lot of people.
In neighborhoods across the city, especially in working-class communities:
So for many workers, ‘No Tax on Tips’ feels like immediate relief.
But at the same time, those same communities rely on:
If funding drops, those systems could feel the impact.
If this policy moves forward, Staten Island could feel it in two different ways.
For a borough that already feels overlooked at times, that balance matters.
What makes this story bigger than just taxes is where the idea came from.
The fact that a concept linked to Donald Trump is now part of New York’s political conversation shows how complicated the current landscape is.
It is not just left vs right anymore.
It is about messaging, survival, and who gets relief first.
Across NYC, reactions are split.
Some workers are all in:
Others are more cautious:
That tension is only going to grow as the policy gets closer to reality.
Right now, ‘No Tax on Tips’ is part of a larger budget and policy conversation happening at the state level.
Nothing is fully locked in yet.
But what is clear is this:
‘No Tax on Tips’ sounds like a simple win.
But in a city like New York, nothing is ever that simple.
It is a trade-off:
And as leaders like Kathy Hochul and Zohran Mamdani continue to clash over direction, one thing is clear:
This is not just about tips.
It is about the future of how New York pays its bills.