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“No tax on tips” is an industry plant

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Re: “No tax on tips” is an industry plant

#51

Post by Aloisius »

radpanda wrote: post #49
Aloisius wrote: post #21

Earlier quoted context omitted.

I live in California and this isn't true here. All restaurant workers receive at least minimum wage before tips. In my city, that's $19/hour with health insurance. Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. I'm not sure why they specifically should be tax exempt…

> even McDonalds is charging $15 for a 4 oz burger Jeez, where is this? According to the famous McCheapest map the most expensive Big Mac in America is about 8 bucks. Have prices really shot up that much recently? https://pantryandlarder.com/mccheapest

https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?s...

What got lost in an edit was that's for the combo with a bag ($0.25 extra).

Re: “No tax on tips” is an industry plant

#52

Post by godelski »

msikora wrote: post #24
Aloisius wrote: post #21

Earlier quoted context omitted.

I live in California and this isn't true here. All restaurant workers receive at least minimum wage before tips. In my city, that's $19/hour with health insurance. Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. I'm not sure why they specifically should be tax exempt…

California doesn't have a special minimum wage for tipped professions? When I was waiting tables a long time ago I think my pay was $1.95 an hour. It was usually just enough to cover tax on tips (the ones we admitted).

  > California doesn't have a special minimum wage for tipped professions?
NO STATE has a "special minimum wage for tipped professionals". MOST STATES allow tips to be *credited* towards wage, but NO STATE allows an employee to be paid less than minimum wage. There's a "special minimum wage THAT EMPLOYERS MUST CONTRIBUTE TOWARDS a tipped professional'S WAGE", but that's a very different thing than "the minimal amount of pay an employee may receive."

The difference is where the money comes from: directly from employer vs directly from customer. But in all cases *the sum of these sources* must equal the minimum wage.

If the employee is not taking home at least minimum wage, then the employer is guilty of wage theft.

If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft.

So instead, read the CA's (and AK, MN, MT, NV, OR, WA) rule as "tips may not be credited towards an employee's salary".

[0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped

Re: “No tax on tips” is an industry plant

#53

Post by godelski »

bsder wrote: post #17
crazygringo wrote: post #15

Earlier quoted context omitted.

Which made a difference 2 or 3 decades ago. But today, who's getting tips in cash? Not many. Customers are paying for everything with credit cards or contactless, save for the occasional cash-only coffee shop or restaurant.

> But today, who's getting tips in cash? Every server who waits on me. I make it a point to carry cash and tip the waitstaff in cash even if I pay the bill on my credit card. 1) Tips on credit cards are a "dark pattern" meant to increase the house rake of the credit card handling companies. 2) Tips on credit cards are controlled by the owner and often never make it to the waitstaff. I can short circuit this by giving…

This is easier to understand when you actually understand what the tipping law is. That tips may act as a credit towards an employee's wage (up to a max that's So like you, I carry cash for tipping. I leave the tip section blank and write the provided total in the "total" line. Then I leave cash. Employee gets to decide if they declare or not (or in other words, if my tip may be credited towards their wage).

Re: “No tax on tips” is an industry plant

#54

Post by godelski »

Workaccount2 wrote: post #40
garciasn wrote: post #7

Earlier quoted context omitted.

I have an honest question: what's the cash vs card tip ratio? 99.999% of the time I am not carrying cash and I don't see many (any?) people paying with cash ANYWHERE in the last 10+ years.

At this point you are litterally a sucker to pay for anything in cash, because everything is marked-up to cover CC fees, which you get a portion of back in the form of rewards. Yes, I know some places give cash discounts. Most do not.

I pay tips in cash. There's technically no CC fees on that.

Re: “No tax on tips” is an industry plant

#55

Post by [deleted] »

Aloisius wrote: post #51
radpanda wrote: post #49

Earlier quoted context omitted.

> even McDonalds is charging $15 for a 4 oz burger Jeez, where is this? According to the famous McCheapest map the most expensive Big Mac in America is about 8 bucks. Have prices really shot up that much recently? https://pantryandlarder.com/mccheapest

https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?s... What got lost in an edit was that's for the combo with a bag ($0.25 extra).

[deleted]

Re: “No tax on tips” is an industry plant

#56

Post by hirvi74 »

limagnolia wrote: post #34
steveBK123 wrote: post #23

All bonuses soon to be labelled as tips.

This is unlikely to be allowed, the last I checked, the law explicitly only allows "traditionally tipped jobs". How it gets interpreted and implemented in IRS Tax Code isn't clear yet, but they will probably have rules in place to prevent this. Doesn't change the fact that it is a terrible idea.

Hmm, this makes me wonder though -- I have noticed various projects on Github and various other sites allow for users and fans of projects to donate to the developers and maintainers. Who hasn't seen the "wanna buy me a coffee?" button on a site before?

I am not sure if the money from such sources was ever taxed as income, but if so, then I wonder if such will be non-taxable now? Considering donation and tip buttons have some history behind them, perhaps such "jobs" could be considered "traditionally tipped jobs?"

Re: “No tax on tips” is an industry plant

#57

Post by 8n4vidtmkvmk »

atmavatar wrote: post #45
jrockway wrote: post #35

Earlier quoted context omitted.

Yeah, there is a lot of shadiness going on these days. I don't think tips should be requested in any sort of transaction where the employee gets paid more than minimum wage. Restaurants always had this weird system where you could avoid paying your employees if they were tipped, so it was drilled into everyone's head "you're stealing from poor innocent workers if you don't tip 20%". But this is not the case for most…

Peak tip cynicism is when you're at an upscale restaurant where the wait staff are obviously being paid more than minimum wage, the bill automatically includes a gratuity (often 18% or more), and then on top of that, there's a line to include another tip.

It's not a "tip" if it's included. Biggest scam ever.

Re: “No tax on tips” is an industry plant

#59

Post by nickthegreek »

spondylosaurus wrote: post #22
chriscrisby wrote: post #10

Earlier quoted context omitted.

That’s a weird way to say a sizable majority of tipped workers do pay taxes and will benefit from this.

Sure, but TFA makes clear that any benefit to workers from tax-free tips is laughable compared to the numbers of times the restaurant lobby has fucked them over, by repeatedly killing attempts to keep wages low. It's not even throwing workers scraps, it's more like throwing them crumbs.

and it’s a not even a forever thing like the rich guys got. this thing sunsets.

Re: “No tax on tips” is an industry plant

#60

Post by aaplok »

chriscrisby wrote: post #10
littlexsparkee wrote: post #3

Some interesting points: ~40% of tipped workers don't make enough to get taxed anyway, no tax on tips would actually advantage better paid workers like casino dealers who don't need the help. NToT is described as a campaign to distract from minimum wage increase initiatives.

That’s a weird way to say a sizable majority of tipped workers do pay taxes and will benefit from this.

Beware the logical fallacy. "A implies B" does not mean that "not A implies not B".

Workers who earn too little to pay taxes (A) will not benefit from a tax cut (B).

But workers who earn enough (not A) may still not benefit (not B), for example because their employer indirectly pockets the difference. That is actually being argued in the article.

So this is indeed the appropriate way of formulating the statement: at least 40% of workers will demonstrably not benefit from this.

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