Former President Donald Trump and Vice President Kamala Harris agree on at least one point: Both say they want to eliminate the federal tax on their employees’ tips.

But experts say there’s a reason Congress hasn’t made such a change yet. Passing it would be complicated and enormously costly for the federal government. It would encourage many higher-paid workers to restructure their compensation by declaring part of it as “tips” and avoiding taxes. And ultimately, it probably wouldn’t help millions of low-income workers.

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“It’s impossible not to cause chaos,” says James Hines Jr., professor of law and economics and research director of the Office of Tax Policy Research at the University of Michigan’s Ross School of Business.

Both candidates unveiled their plans in Nevada, a state with one of the highest concentrations of tipped service workers in the country. Trump announced a proposal to exclude tips from federal taxes on June 9. Harris announced a similar proposal on August 10.

Details were sparse. Neither candidate team has said whether tips should be exempt from income taxes only, payroll taxes only, or both. Payroll taxes fund Social Security and Medicare.

Harris’ campaign has said she will work with Congress to develop a proposal that includes an income limit and other provisions to prevent abuse by wealthy individuals who might try to structure their compensation so that certain fees are classified as tips.

Her campaign said the requirements, which were not specified, were intended to “prevent hedge fund managers and lawyers from structuring their compensation in a way that would allow them to profit from the rule.” Trump’s campaign has not said whether its proposal would include such requirements.

Still, Hines suspects millions of workers — not just wealthy ones — would seek to change their compensation to include tips, and could even do so legally. For example, a company could create a separate entity that rewards its employees with tips instead of year-end bonuses, he said.

“There will be taxpayers who will urge their lawyers to classify their wage and salary income as tips,” Hines said. “And some will inevitably succeed because it is impossible to formulate foolproof rules that cover every situation.”

Republicans who support Trump argue that Hines’ concerns are overblown. Darin Miller, a spokesman for Senator Ted Cruz of Texas, said the IRS has a precise definition of tips and argued that reclassifying the wages would be considered fraud.

Miller noted that some Democrats have signed on as co-sponsors of a bill Cruz introduced in June to exempt tips from federal income taxes. A bill to exempt tips from payroll and income taxes has also been introduced in the House.

Although supporters say the measures are specifically designed to help low-income workers, many experts say exempting tips from taxes would provide only limited help to those workers.

Yale’s Budget Lab, a nonpartisan policy research center, estimates that there will be four million workers in tipped jobs in the United States by 2023. That would be about 2.5 percent of all workers, including restaurant waiters and beauticians.

Tipped workers tend to be younger, averaging 31 years old, and have lower incomes. According to Budget Lab, the median weekly wage for tipped workers was $538 in 2023, compared to about $1,000 for non-tipped workers.

As a result, many tipped workers already bear a lower income tax burden. In 2022, 37% of tipped workers had such low incomes that they paid no federal income tax at all, according to Budget Lab.

“If you’re concerned about low-income earners, there are much better ways to address this problem, such as expanding the Earned Income Tax Credit or changing tax rates or deductions,” Hines said.

In her speech in Nevada, Harris also called for an increase in the federal minimum wage. (The minimum wage is not mentioned on Trump’s campaign website.)

Changing federal tip tax policy would also be costly. The Committee for a Responsible Federal Budget, a bipartisan group, estimates that exempting all tips from federal income and payroll taxes would reduce revenue by $150 billion to $250 billion between 2026 and 2035. And it says that amount could rise significantly if policy changes behavior and more people declare tips.

Regardless of whether Trump or Harris wins the presidential election, tax policy will be at the top of Congress’s agenda in 2025, as the Trump-era tax cuts passed in 2017 are about to expire.