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Indiana's next Trump loyalty test: Will the state stop taxing servers' tips?

Madison Potts, a 26-year-old server at The District Tap in downtown Indianapolis, often dreads the approaching tax filing deadline each April. It's in some ways a game of roulette: will she owe $1,000 in taxes on her tips, or $6,000? And if it's more than she budgeted for, how will she compensate so she can support her 20-month-old girl? But April could become more certain for Potts if state lawmakers choose to adopt the tax changes made by President Donald Trump's One Big Beautiful Bill Act passed earlier this year, which includes a provision that would allow eligible workers to avoid paying taxes on their first $25,000 in tips. While the legislation provides an effective tax cut for tip workers on their federal tax returns, they still have to pay those state taxes. Conforming with federal tax changes is an annual process that's "usually a fairly unremarkable thing," said Justin Ross, a public finance economist at Indiana University. Now, thanks to legislation that enacted some of the largest tax cuts in history, it has become a potentially expensive decision for Indiana, and maybe a political one.

Does the Republican supermajority break with President Donald Trump's tax changes in Indiana when lawmakers come back to the Statehouse on Jan. 5, or does the state take the financial hit?

New Indiana governor's push to cut property taxes squeezes local governments.

When Braun became Indiana's new governor this January, he emphasized that cutting property taxes was his No. 1 legislative priority. The result of his efforts, Senate Enrolled Act 1, will save most homeowners up to $300 on their property tax bills and slash taxes for businesses. But the response to SEA 1 from local governments has been overwhelmingly negative, as communities prepare to go without millions in expected tax revenue over the coming years. Indianapolis leaders say they face a $60 million drop in tax revenue projections through 2028 because of the new law. Hamilton County officials have paused plans for a domestic violence shelter. Carmel leaders cut arts funding and their Noblesville peers postponed trail improvements. Indiana school districts — expected to miss out on more than $700 million in property tax revenue through 2028 — are turning to voters to pass tax referendums to plug the gaps. In order to maintain quality of life, cities and towns could be all but forced to impose new income taxes that offset some of the property tax savings. Otherwise, leaders say they risk falling behind in funding the amenities — schools, public safety, parks and transit — that make people want to live in their communities.

Indiana to receive $200 million from Trump administration for rural health: What it'll pay for

Indiana will receive more than $200 million to invest in rural health care quality and access in 2026, in only the first infusion of federal dollars anticipated over the next five years. The money is part of a five-year, $50 billion program specifically meant for investing in rural health initiatives as part of President Donald Trump's One Big Beautiful Bill Act passed in July. All 50 states received some type of grant award from this first $10 billion round, with Indiana's $207 million being roughly the average amount given.

This is the same law that made massive cuts and policy changes to Medicaid in an effort to pay for the bill's trillions of dollars in tax cuts. Senators added this $50 billion rural health fund late in the process to sweeten the deal for Republicans who were uneasy about the Medicaid cuts. Indiana's Family and Social Services Administration and Department of Health will use the money to promote preventative care, attract and retain the rural workforce, improve collaboration between rural providers and regional health systems, implement new service models and increase access to digital health tools.

“Indiana’s rural communities are the backbone of our state, and this investment will help ensure that every Hoosier, regardless of where they live, has access to high-quality, sustainable healthcare,” Gov. Mike Braun said in a statement announcing the grant award.

The state of rural health in Indiana, More than two-thirds of Indiana's counties are considered rural by the standards of the Federal Office of Rural Health Policy. These counties tend to be older and have worse health outcomes: lower life expectancy, higher rates of chronic diseases like obesity and diabetes, and higher rates of suicide and opioid deaths. Indiana plans to implement a number of statewide initiatives, but the bulk of federal money will go directly to "regional coalitions" in the form of grants. Those coalitions will determine their hyperlocal needs and apply for the money.

From 2025 That Tell A Deeper Story

#1 As 1999 began, a Gallup survey found that 70 percent of Americans were satisfied with how things were going in the United States.  As 2025 ends, only 24 percent of Americans are satisfied with how things are going in the United States.

#2 In 1980, the fact that the U.S. national debt had reached a trillion dollars was a really big deal.  But now our national debt has surpassed the 38 trillion dollar mark and there is seemingly no end in sight.

#3 Globally, the total amount of debt in the world has reached an almost unbelievable total of 337 trillion dollars.

#4 In 2025, more than half of all of the nations on the entire planet were either directly involved in military conflict or were funding it.

#5 At the start of 2025, you could purchase an ounce of silver for about 30 dollars.  As 2025 ends, an ounce of silver will cost you more than 70 dollars.

#6 Crypto investors lost about $800,000,000,000 during the month of November alone.

#7 Well over 50 percent of the global population lives in a nation where Christians are being violently persecuted.

#8 In more than 50 percent of the nations on the entire planet, the total fertility rate is now below replacement level.

#9 One recent survey found that almost two-thirds of all church leaders that prepare sermons "use AI tools in their sermon writing process".

#10 Earlier this year, we witnessed 494 earthquakes of magnitude 5.0 or greater within a 30 day period.  That was about 4 times as many earthquakes of magnitude 5.0 or greater than we normally experience in a typical month.

#11 Globally, natural disasters caused a total of $120,000,000,000 in economic damage in 2025.

#12 The number of Americans that are dealing with food insecurity has almost doubled since 2021.

#13 The United Nations is warning that nearly 10 percent of the entire population of the globe is now going to bed hungry each night.

#14 Approximately 1.2 million foreign students are currently attending colleges and universities in the United States.  How many U.S. students have been denied admission in order to make room for those students at our best schools?

Posted on January 2, 2026 by Chris Monaghan