Last week, Ohio State Representative Jay Edwards of Nelsonville said introduced a bill to declare the intention to exempt tips and gratuities from income tax.

This happens one month after Donald Trump announced his intention to exempt tips from income taxes if he is elected president this year.

On its face, exempting tips from income tax makes sense for someone trying to ease the burden on low-income workers. Edwards represents a swath of southeastern Ohio that includes some of the state’s poorest counties, including Athens County, which regularly ranks as the state’s poorest county. even after taking into account the large number of college studentsSupporting low-income earners makes sense here.

However, the exemption of tips from income tax has been criticized by analysts in think tanks across the political spectrum, from the Conservatives Tax Foundation to the liberal Center for American Progress.

Howard Gleckman is one of the nation’s most attentive and astute tax analysts. He is a senior fellow at the Urban-Brookings Tax Policy Center, the nation’s leading tax policy think tank.

Gleckman wrote about the problems with exempting tips from income taxes in a commentary last month. The simplest problem with the proposal is that low-income earners often don’t have much, if any, tax debt.

In Ohio, the average waiter or waitress earns earns only $33,930 per year. Since Ohio only begins taxing income at $26,050This means that many waiters and waitresses pay no income tax at all. Combine this with credits like the federal Earned Income Tax Credit, which reduce tax liability, and this problem becomes even more acute.

However, this does not mean that the potential effectiveness of this policy for low-income workers is compromised. Edwards’ proposal is still abstract at this point. Framing the policy as a refundable credit could overcome this equity problem.

Another issue Gleckman raises with the exemption of tips from income tax is the possibility that this provision will compete with a more effective measure to support tipped workers: equalizing the minimum wage for tipped workers with the regular minimum wage.

Ohio’s most practical minimum wage proposal is a citizens’ initiative called “Ohio Minimum Wage Increase Initiative”. It has not qualified for the 2024 ballot, but could be on the ballot in November 2025. This minimum wage initiative would increase the state minimum wage to $15 for all occupations. This would have a significant impact on non-tipped workers, who currently earn $10.45 per hourbut would have a greater impact on tipped workers, whose minimum wage is currently $5.25.

While eliminating the income tax on tips will help many high-earning workers (such as waiters and waitresses in fine dining restaurants), it is probably not the best way to help low-earners. Expanding the federal earned income tax credit or increasing the federal minimum wage are more likely to help low-earners overall. Still, it is encouraging to see that policymakers are focusing on the plight of low-earners and working to develop policies to help them.