Currently, tipped employees are required to disclose all tips over $20 per month to their employer.
The federal government then collects a share of that money through income and payroll taxes.
AJ Hanson, general manager of the Plymouth Tavern, is in favor of the policy and believes it will help service workers and incentivize people to tip more, especially throughout Pennsylvania.
"In states like Pennsylvania, where people know that the serving staff is only making $2.83 an hour, they go above and beyond when they tip," Hanson said.
Alex Muresianu, senior policy analyst at Tax Foundation, said after looking at the policy, he has some concerns.
"The first question is why do you design a policy that just benefits tipped workers, who do tend to be lower or moderate income but why just them, and another concern is that will that group of people, that you intend to benefit, be the only people who benefit and will you instead have a lot of tax planning by perhaps higher income people who you are not necessarily trying to target," Muresianu said.
Muresianu also said the policy is a solution in search of a problem and both candidates may be using it to score political points.
"There is not really a justification for tipped income being treated differently from other wages and salaries and so I think the ultimate motivation here is political and not really based on policy, it is higher taxes for everybody else, at the end of the day," Muresianu said.