Are Tools All We Need? Unveiling the Tool-Use Tax in LLM Agents
arXiv cs.AI / 5/4/2026
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Key Points
- The paper challenges the assumption that tool-augmented reasoning in LLM agents always improves reliability, showing cases where it can underperform native chain-of-thought (CoT) when semantic distractors are present.
- It introduces a Factorized Intervention Framework to separate the performance effects of prompt formatting cost, tool-calling protocol overhead, and the real benefit gained from executing tools.
- The analysis identifies a “tool-use tax”: performance degradation caused specifically by the tool-calling protocol, which can outweigh tool benefits under semantic noise.
- To reduce protocol-induced errors, the authors propose G-STEP, a lightweight inference-time gating mechanism that partially recovers performance.
- The findings conclude that to achieve larger gains, systems likely need improvements to the model’s intrinsic reasoning quality and its ability to interact with tools, not only better prompting or tool use.
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