It invites gaming that will erode the tax base. Trump's policy encourages plumbers, electricians, and various other workers to offer customers a discount rate, if they're willing to pay in "tips." Of course, this sort of tax avoidance is not formally condoned. But it will be extremely difficult to police (especially given the president's defunding of IRS enforcement).
It entrenches a fundamentally inefficient and inequitable approach to compensation. Standardized wages provide workers with predictable incomes and protection against discrimination. Yet Trump's policy is likely to encourage employers to shift more roles into tipped categories, so as to capture its tax advantages. This will yield an economy in which more workers' pay is contingent on the generosity of their patrons (and liable to fall below the federal minimum wage)…
https://www.vox.com/politics/460158/no-tax-on-tips-jobs-workers-list-populism
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