This conceptual paper aims to examine the recently enacted “No Tax on Tips” (NTOT) provision within the 2025 One, Big, Beautiful Bill and Tip Credit policies by applying policy feedback and economic citizenship theories. Exploring the interaction between the NTOT and the federal tip credit, it assesses how the NTOT provision aligns with broader goals of labor equity, social responsibility and sustainable employment.
This paper critically synthesizes current policy analysis, empirical examples and existing literature on corporate social responsibility, labor equity and wage structures in the hospitality industry. It critically analyzes the NTOT provision and the federal tip credit policy through the lens of social sustainability.
The new conceptual model, the policy-organization-worker framework, explains how public policy, corporate responsibility and worker citizenship interact to shape labor equity in the hospitality industry. The model illustrates how wage and tax policies influence organizational practices and employee outcomes, creating feedback loops that can either reinforce or reform systemic inequities.
The policy-organization-worker framework provides a powerful model for understanding how policy features and firm practices interact to perpetuate labor inequities and outlines pathways for reform.
From a social responsibility standpoint, policies like NTOT create uneven benefits, favoring high-earning or high-volume tipped workers while offering minimal relief to those near or below the poverty threshold.
This paper offers a timely and critical examination of the NTOT. A conceptual framework is developed that highlights the policy's benefits and challenges and ultimately calls for structural reforms that prioritize living wages, worker dignity and sustainable employment practices.
