The only campaign proposal that Kamala Harris and Donald Trump agree on

Although it seems practically impossible, there are some issues that Kamala Harris and Donald Trump agree on. The Democratic candidate for president announced Saturday that if she wins the race to the White House, she will eliminate taxes on service industry tips. The move was widely applauded in Las Vegas, which has a robust hospitality industry employing some 300,000 workers. But there’s a catch: Trump launched the same proposal, in the same city, two months earlier, after a waitress complained that the government keeps too much of her paycheck. “This was a TRUMP idea - She has no ideas, she can only steal from me,” the GOP candidate wrote on Truth Social.

The MAGA movement has since Sunday focused its artillery against Harris, deeming her a plagiarist for taking up one of Trump’s less radical proposals. “The difference is, she won’t do it, she just wants it for Political Purposes,” stated the Republican, who is competing neck-and-neck with Harris to take Nevada in November. According to 538, ABC’s polling project, the current vice president is ahead of the former president by a margin of 0.6%.

The Culinary 226 union, which represents some 60,000 hospitality workers in Nevada, has celebrated that its own tips will be exempt from taxes and the minimum wage raised, another of the initiatives announced by Harris. The organization endorsed the Democratic candidate before her visit to Las Vegas. Meanwhile, it has remained silent on Trump’s original proposal. A Harris campaign spokesman assured NPR on Tuesday that the proposals are different but that details will be forthcoming.

Democratic Congressman Steven Horsford called Trump’s bluff. “If Trump really wanted to help tipped employees, he would be advocating for elimination of the federal subminimum wage for tipped workers,” the lawmaker said before Harris echoed the tip issue. Horsford was referring to the federal minimum wage for service industry workers, which has been stuck at $2.13 per hour since 1990. Meanwhile, the federal minimum in other jobs is $7.25 per hour. Seven states, including Nevada, have passed laws that prohibit paying the first amount.

The tax break has been attractive to Nevada, where many hotel and casino employees earn, on average, $4 less per hour than in other states. The proposal, however, would benefit all hotel and casino workers in the country: about 2.3 million people, according to the latest available statistics from the Department of Labor, from May of last year. The average annual income for these workers is $36,500.

Nevada’s two senators, Catherine Cortez Masto and Jacky Rosen, who are seeking re-election in November, are also in favor of the measure. Both have joined an initiative that Senator Ted Cruz, a radical Republican from Texas, introduced in July. This shows that, at least prior to the election, the two major parties have been in tune and willing to move the proposal forward.

Skeptical economists

Although it has electoral traction, economists have been less than enthusiastic about the proposal. Experts believe that the plan would not deliver the benefits that sound so appealing at political rallies. Firstly, because it would not change the reality for most low-income workers: fewer than three out of every 100 employees in the country rely on tips to supplement their wages, according to Yale University. The base of this workforce are teenagers and those aged under 25.

“How are you going to determine who is getting a tip and when that tip goes over the wage threshold?” asked Steve Rosenthal of the Urban-Brookings tax think tank. The analyst told public radio that the measure could disproportionately benefit waiters who have a low minimum wage but receive a lot of tips. In contrast, in states like California, where wages are higher and tips are lower, it would barely make a difference to their income.

If approved by Congress, the bill could leave tax authorities with a $150 billion to $250 billion hole over the next decade, according to the nonprofit Committee for a Responsible Federal Budget. If the policy is accompanied by a minimum wage hike, the U.S. deficit could balloon by another $200 billion between 2026 and 2035, the group says.

There are also fears that it would distort the labor market. “In practice, the tax exemption could lead employers to recharacterize ordinary income as tips, which could result in lower wages and higher tips. The magnitude of that effect is uncertain and would depend significantly on the regulations that accompany the rule,” the nonprofit added. The Harris campaign, without entering into specifics, said its proposal would be accompanied by requirements to prevent businesses from taking advantage of this.

Kid Rock, who performed at the Republican National Convention that anointed Trump, has been spreading the word about the initiative. Last month, the musician posted a photo of himself leaving a $400 tip on a $1,143 bill at a Kentucky steakhouse. “A vote for Trump is a vote to end tip taxes,” he wrote.

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