If anyone is going to exploit a “no tax on tips” law, it’s going to be high-income lawyers and hedge fund/high finance people, and the IRS will lose vastly more tax revenue from them than what they’d lose from service workers’ tips.
So while it may sound nice, it’s just another avenue for exploitation by the rich and not a good idea, Think about it: it’s Trump who brought up the idea (which ofc some advisor gave him since he doesn’t do ideas), and who do you think they are trying to benefit? Not service workers, we can be sure of that.
If we could just get rid of stupid tipping culture and pay a living wage that doesn’t depend on tips but is accounted for in the prices, then we could also not track and therefore not tax tips, since they’d rarely be given, and even if they are they’d be in smaller amounts than the usual 15-20% or whatever, since the customer is not feeling a burden of providing their living but just wants to add a small monetary recognition for especially good service.