Vice President Kamala Harris and former President Donald Trump don't agree on much, but they both want to stop taxing tips. This rare agreement could bring big changes to workers in the service industry, many of whom rely on tips as part of their income.

Harris Joins Trump on Tax-Free Tips

At a recent rally in Nevada, Harris promised to fight for service workers by eliminating taxes on tips. This promise came after Trump made a similar pledge earlier this year, during his campaign in Las Vegas. Trump started talking about the issue in June after hearing from a server who said the government was taking too much of her tips.

Though Harris supports the same idea, Trump accused her of copying his plan for "political purposes."

Support for Tax-Free Tips in Congress

The idea has gained support from both Republicans and Democrats. Senator Ted Cruz from Texas, along with Democratic Senators Catherine Cortez Masto and Jacky Rosen from Nevada, have introduced the "No Tax on Tips Act." They’re backed by the Culinary Workers Union Local 226, which represents many service workers in Nevada.

Experts Raise Concerns

Not everyone agrees that making tips tax-free is a good idea. Tax expert Steve Rosenthal says it would be hard to regulate. It might also benefit workers in states with lower minimum wages, like South Carolina, more than those in states like California where wages are higher.

Rosenthal also worries about how this would affect the labor market. He questions how the government would keep higher-paid workers from finding ways to claim their income as tips, avoiding taxes.

Cost to the Government

Another big concern is the loss of revenue. Some experts estimate that making tips tax-free could cost the government hundreds of billions of dollars over the next ten years. This makes it a hard sell in Congress, where lawmakers are already concerned about the budget.

Union Support for Harris

Despite the challenges, Harris has gained the support of the Culinary Workers Union. This union, which represents many tipped workers, has been fighting for fairer tax policies for years. They praised Harris for supporting their cause.

What’s Next?

Both Harris and Trump are pushing for tax-free tips, but so far, neither has released a full plan. Still, this proposal could make a big difference for workers across the country who rely on tips to earn a living.

As we wait to see if this idea becomes law, it's clear that the debate over tipping and taxes is only just beginning.

For more on tax rules affecting service workers, check out this helpful guide on tax planning.