Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

theguardian.com

Post reply on HN
Print view View original

11–20 of 228 posts

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#11

Post by r3trohack3r »

throwaway48540 wrote: post #6
more_corn wrote: post #2

How about no tax on people below the poverty line? When I was young it always killed me to make so little and still pay taxes.

That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude - and then of course you have to consider https://en.m.wikipedia.org/wiki/Laffer_curve Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid wo…

Interested in digging deeper, do you have a source for this:

> That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#12

Post by bko »

I don't like tipping culture, but it does allow for wealthy people to subsidize service and incentivizes good service.

People that are more price sensitive tip lower and every once in a while a waiter will experience an extremely generous tip. I'm not convinced that forbidding tips would increase net wages paid to servers.

In terms of who is paying, restaurants will simply raise prices to account for higher wages. Their margins aren't that big.

Finally I think tipping definitely incentivizes good service. Its partly cultural, but I've noticed much higher level of service in the US compared to Europe were tips are not expected as much

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#13

Post by bena »

throwaway48540 wrote: post #6
more_corn wrote: post #2

How about no tax on people below the poverty line? When I was young it always killed me to make so little and still pay taxes.

That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude - and then of course you have to consider https://en.m.wikipedia.org/wiki/Laffer_curve Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid wo…

The Laffer curve is just kind of made up. He just said "I believe this is how it should work" and then tried to make it work, even though it never quite does. And it often turns in results that its proponents don't like.

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#14

Post by mewpmewp2 »

r00fus wrote: post #7
beaglesss wrote: post #5

What's more likely is some bean counter at the IRS realized enforcing taxes on tips cost more money to enforce than they gained, or was barely break even. It's an easy political win at no risk.

What's to prevent corporations and the rich from taking advantage of this? ie, my job is $10k + rest in "tips"?

Yeah, maybe unintuitive, but even if it costs more to collect and enforce taxes than you get from taxes, it also has a preventative side to not abuse it.

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#15

Post by bena »

beaglesss wrote: post #5

What's more likely is some bean counter at the IRS realized enforcing taxes on tips cost more money to enforce than they gained, or was barely break even. It's an easy political win at no risk.

I don't think this is spearheaded by the IRS at all.

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#16

Post by alemanek »

throwaway48540 wrote: post #6
more_corn wrote: post #2

How about no tax on people below the poverty line? When I was young it always killed me to make so little and still pay taxes.

That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude - and then of course you have to consider https://en.m.wikipedia.org/wiki/Laffer_curve Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid wo…

When you account for all taxes this may be true but for just income taxes it isn’t. According to the link below the bottom 50% makeup just 2.34% of income taxes paid. So, eliminating income taxes and maybe adding a return free filing option for the bottom 50% of households looks super doable.

Source: https://www.ntu.org/foundation/tax-page/who-pays-income-taxe...

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#17

Post by afavour »

IMO it's just bad policy all round without a significantly higher level of detail. For example, how do we classify a tip vs a wage? If we're not very, very specific about it's going to be yet another tax loophole exploited by the rich who will pay each other $1 for work and then 'tip' thousands more.

Sure you’re an engineer on staff now but wouldn’t you want to be a freelancer, paid minimum wage and then a healthy “tip” every two weeks? Win win: I don't pay for benefits, you don’t pay tax.

No tax on tips can be sold as a benefit to the working poor while the small print can be written to favor the rich… no wonder politicians of all stripes are clamouring for it.

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#18

Post by [deleted] »

throwaway48540 wrote: post #6
more_corn wrote: post #2

How about no tax on people below the poverty line? When I was young it always killed me to make so little and still pay taxes.

That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude - and then of course you have to consider https://en.m.wikipedia.org/wiki/Laffer_curve Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid wo…

[deleted]

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#19

Post by silisili »

Aunche wrote: post #10

Increasing the tipped minimum wage means that restaurants will add that cost to the menu. Because tips are based a percentage of your order, this means that customers actually pay more money in tips, even though these laws are marketed as reducing the need for tips.

I think (hope) the expectation is to eventually increase wages and prices and phase out tips altogether. Tip culture has gone insane...even my home inspector's last invoice has a tip line!

Re: Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

#20

Post by cj »

Aunche wrote: post #10

Increasing the tipped minimum wage means that restaurants will add that cost to the menu. Because tips are based a percentage of your order, this means that customers actually pay more money in tips, even though these laws are marketed as reducing the need for tips.

> these laws are marketed as reducing the need for tips.

One of the presidential candidates gave a speech recently with a back drop that said “no taxes on tips” or something.

That did nothing for me in terms of thinking meals would be cheaper. I assume they’re marketing the idea to restaurant workers directly rather than patrons.

Post reply on HN