Something Harris and Trump can agree on: Tips for service workers should not be taxed

• Kamala Harris said she supports ending taxes on tips for hospitality workers.
• Trump, who made a similar proposal months ago, says Harris copied him.

Vice President Kamala Harris had a rare moment of like-mindedness with former President Donald Trump, though the latter isn't thrilled about it.

At a campaign rally on Saturday in Las Vegas, where the hospitality industry dominates the economy, Harris said she supported eliminating taxes on tips for service workers.

"When I am president, we will continue our fight for working families of America, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers," Harris told a crowd of supporters.

Her comment came weeks after Trump suggested a similar idea, also in Nevada, and Trump didn't hesitate to point that out. On Saturday, he took to Truth Social, his social media platform, to air his thoughts.

"Kamala Harris, whose 'Honeymoon' period is ENDING, and is starting to get hammered in the Polls, just copied my NO TAXES ON TIPS Policy," Trump wrote. "The difference is, she won't do it, she just wants it for Political Purposes! This was a TRUMP idea - She has no ideas, she can only steal from me."

The Trump campaign then issued a press release on Sunday.

"Copy Cat Kamala directly plagiarized President Trump's No Tax on Tips policy proposal to let hard-working service workers keep more of their own hard-earned money," Steven Cheung, the campaign's communications director, said in the release. "If she actually wants to end taxes on tips, why won't she do it now, considering she's part of the administration currently in charge?"

While Biden has supported similar initiatives, like raising the minimum wage, changing how tipped income is taxed isn't something the executive branch can do on its own. It requires an act of Congress. Several congressional Republicans proposed the "No Tax on Tips Act," which has so far garnered limited bipartisan support.

But it's not as simple as it might sound.

Tax law experts previously told Business Insider that tax-free tipping could create a two-tiered system where service workers who work for tips, like waiters and bartenders, outearn other minimum-wage workers who don't get tips. Workers might also annoy already tip-weary consumers with their appeals for more tips.

It could also lead to tax evasion if employers, operating on the belief that their employees will make more money via untaxed tips, slash their wages to lower their payroll fees and Social Security taxes.