Trump and Harris both want no taxes on tips. Here's why policy experts don't like the idea

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U.S. Vice President Kamala Harris and Republican presidential nominee and former U.S. President Donald Trump. Former President Donald Trump and Vice President Kamala Harris both want to end taxes on tips — and some policy experts have already criticized the idea. Harris expressed support for tax-free tips at a rally on Saturday in Las Vegas. Her comments come roughly two months after Trump shared a similar idea, also at a rally in the service economy hotbed. Nevada is a key battleground state where the hospitality sector accounts for roughly one-quarter of the workforce, according to the state's June employment data. "It is my promise to everyone here, when I am president, we will continue to fight for working families, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers," Harris said at her rally. More from Personal Finance: Vance wants $5,000 child tax credit that could be difficult Trump, Vance pitch presidential influence on Fed policy Walz vs. Vance: What candidates could mean for your wallet In 2023, there were roughly 4 million U.S. workers in tipped occupations, representing 2.5% of all employment, according to estimates from The Budget Lab at Yale University. Generally, tipped workers are lower-income individuals, and some 37% weren't subject to federal income tax in 2022, the report found. As a rule, employed workers who make less than their standard deduction don't owe federal income taxes. Not taxing tips is "a fairly narrowly targeted tax exemption," said Garrett Watson, senior policy analyst and modeling manager at the Tax Foundation. Still, the idea has some bipartisan support in Congress with a bill introduced in the Senate in July and a House companion bill.