HR2621-119

In Committee

REAL AMERICA Act

119th Congress Introduced Apr 3, 2025

Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.

Summary

The REAL AMERICA Act makes several changes to federal income taxes. It creates new tax deductions for cash tips and overtime pay, both available to workers earning under ,000 per year (,000 for joint filers). It eliminates federal taxes on Social Security benefits starting in 2026, while appropriating funds to keep Social Security trust funds whole. On the revenue side, the bill closes the carried interest loophole by requiring that investment fund managers pay ordinary income tax rates on their performance-based compensation rather than lower capital gains rates. It also changes how partnership interests received as compensation for services are valued and taxed.

Evidence Chain:

This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.

At a Glance

What This Bill Does

Amends the Internal Revenue Code to provide tax deductions for cash tips and overtime compensation, repeal taxation of Social Security benefits, modify rules for partnership interests transferred for services, and close the carried interest tax loophole by recharacterizing carried interest income as ordinary income.

Who Benefits

  • Tipped workers
  • Hourly workers earning overtime
  • Social Security recipients

Who Bears Costs

  • Investment fund managers (hedge funds, private equity)
  • Federal revenue (net impact uncertain)

Key Policy Areas

Tax Policy, Labor, Social Security, Finance

Primary Purpose

Amends the Internal Revenue Code to provide tax deductions for cash tips and overtime compensation, repeal taxation of Social Security benefits, modify rules for partnership interests transferred for services, and close the carried interest tax loophole by recharacterizing carried interest income as ordinary income.

Policy Domains

Tax Policy Labor Social Security Finance

Legislative Strategy

"Populist tax relief package that pairs worker-oriented tax deductions (tips, overtime, Social Security) with a revenue-offsetting closure of the carried interest loophole used by wealthy investment fund managers"

Legislative Progress

In Committee
Introduced Committee Passed
Apr 3, 2025

Mr. Cohen (for himself and Mr. Carson) introduced the following …

Apr 3, 2025

Introduced in House

Apr 3, 2025

Referred to the House Committee on Ways and Means.

Stakeholder Effects

cui bono?

How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.

Government
7 mentions across 5 clauses
+3 positive -3 negative ?1 uncertain

Social Security Trust Funds, Social Security recipients, U.S. Treasury / federal revenue

U.S. Treasury / federal revenue faces effects in multiple directions

Labor
2 mentions across 2 clauses
+2 positive

Hourly workers earning overtime pay

Financial Services
2 mentions across 2 clauses
-2 negative

Investment fund managers (hedge funds, private equity, venture capital)

Food & Beverage
2 mentions across 2 clauses
+2 positive

Tipped workers (restaurants, hospitality, personal services)

Business
1 mention across 1 clause
-1 negative

Employers required to report overtime on W-2

7/9
sections analyzed
Full impact breakdown

Bill Structure & Actor Mappings

Who is "The Secretary" in each section?

Domains
Tax Policy Labor
Domains
Tax Policy Social Security
Domains
Tax Policy Labor
Domains
Tax Policy Finance
Domains
Tax Policy Finance

Key Definitions

Terms defined in this bill

3 terms
"cash tips" §2(a)

Cash tips received during the taxable year included on statements furnished to the employer pursuant to section 6053(a)

"qualified overtime compensation" §4(c)

Overtime compensation paid as required under section 7 of the Fair Labor Standards Act of 1938 in excess of the regular rate, excluding amounts deducted under section 224

"investment services partnership interest" §6(b)

An interest in a partnership held by a person providing investment management services to the partnership, including carried interest arrangements

We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.

Learn more about our methodology