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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

#411

Post by Noumenon72 »

KennyBlanken wrote: post #118
bapak wrote: post #74

Earlier quoted context omitted.

The crazier part is that it's spreading to more industries and more countries thanks to Americans thinking they should tip everyone everywhere. Thanks.

No, it's spreading because corporations are waking up to what an insanely good deal "pay my employees for me" is. In my state an employer is only responsible for raising an employee's effective wage (for the entire pay period) to minimum wage if the tips don't. You can tip someone working as a waiter $100 and unless they've already hit minimum wage for that pay period, all you're doing is handing $100 to the owner be…

I'm guessing this barely applies in practice, since only 1% of hourly employees make minimum wage. A tipped employee who doesn't reach minimum wage is probably getting fired regardless.

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

#412

Post by flanked-evergl »

wat10000 wrote: post #405
flanked-evergl wrote: post #401

Earlier quoted context omitted.

I have never lived anywhere where there are employer-paid taxes on employee pay. Have you? Do you even know of a country like that?

The United States has federal payroll taxes of which half are paid by the employer.

Social Security and Medicare (FICA) is not exactly a tax, if that is what you are talking about. There is FUTA (Federal Unemployment Tax) paid by employers, but this is quite low, certainly not a significant portion of tax revenue.

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

#413

Post by lcnPylGDnU4H9OF »

pc86 wrote: post #377
oellegaard wrote: post #71

It’s crazy that this still happens in the US. Tipping is a thing of the past. Pay for your meal and have the restaurant pay their people for their work. End of story.

What's crazy is that you can so confidently claim "tipping is a thing of the past" when it's... not? You can think tipping should go away, that's a completely valid viewpoint. But your statement is just objectively wrong. I see this a lot (not specific to HN) - some person doesn't like $THING, so they just declare that that thing is bad, or "a thing of the past," or whatever.

Saying something is a “thing of the past” is the same as saying that something is archaic and should go away. It’s not a declaration of fact.

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

#414

Post by sjsdaiuasgdia »

lithos wrote: post #270
rhplus wrote: post #245

Earlier quoted context omitted.

Surely most customers would benefit from knowing that they’re bidding for service? Don’t call it a tip, but a bid or priority fee.

You already are able to pay more for 5-20 minutes of "priority".

In my experience, choosing the priority option is nearly a guarantee that I will get a driver who makes extra stops while delivering my order.

It's wild because this happens maybe 10-15% of the time for me when I don't choose priority, but it's around 80% when I do.

I ignore the option now and just bump the tip if I want a chance of better service.

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

#415

Post by ImJamal »

Wololooo wrote: post #183
ffsm8 wrote: post #157

Earlier quoted context omitted.

I do, it creates perverse incentives and dehumanizes people. Imagine yourself catering someone and then having them talk about how great that is and wanting to pay you for that. Not in abstract but actually, in practice. It nails down the servant role, frankly. It feels abhorrent to me, even if you get numb to it over time. From my perspective, tipping is a socially acceptable way to establish classes. Which itself i…

It really depends on the amount. In Belgium for instance there would be no tipping, but rounding up or adding one or two spare coins of change you still have on you in case the service was excellent. It is like any job where people get a bonus because they have gone above and beyond.

Giving extra money is literally tipping?

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

#416

Post by lcnPylGDnU4H9OF »

xp84 wrote: post #380
kelnos wrote: post #192

Earlier quoted context omitted.

In California we've set the tipped minimum wage to the same as the non-tipped minimum wage (so employers have to pay their employees the same regular minimum wage regardless of whether or not it's a tipped job). Unfortunately, that hasn't fixed the tipping problem. Of course, a living wage in California is quite a bit higher then even our above-average minimum wage, so that's a big part of it.

I'd argue that (our socially-obligatory form of) tipping is a deceptive pricing practice (not really any better than a store labeling shelves with a giant $4 and a .99 written so small you need a magnifying glass to perceive it). As such, if banning it is too impractical, they should disincentivize it with the tax system. I can't figure out the best way, but it's disappointing that our government is obviously not try…

> deceptive pricing practice

It even has a name.

https://en.wikipedia.org/wiki/Drip_pricing

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

#417

Post by assword »

aidenn0 wrote: post #373
xp84 wrote: post #365

Earlier quoted context omitted.

Not in all states. California does not have a lower tipped minimum wage. It's at least $16 here last I checked (except $20 for fast food because "reasons")

Ah yes; for a bit my wife was making less as a preschool teacher than the minimum wage at McDonalds. I understand it caused a bit of turnover at the local public schools, since cafeteria workers and aides were making less than $20/hr in 2024 as well (I don't know if they still are).

Reminds me of when I was visiting family a few years ago in Kentucky. I kept seeing tons of ads everywhere about hiring for plumbers, and some warehouse roles.

The listed salaries were not that far off from what even the local McDonald’s was paying

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

#418

Post by geodel »

vladvasiliu wrote: post #330
gmadsen wrote: post #324

Earlier quoted context omitted.

It is a mechanism to move labor costs to the consumer. On some delivery apps , the driver can decide which jobs to take based on the pre-service tip. So the companies have effectively put the responsibility to pay driver's base wage on the users themselves, while the company still takes a huge corporate cut

> It is a mechanism to move labor costs to the consumer. How does this work? The corp already handles some form of payment to the worker, especially when you tip as part of a card payment. And in both cases, the consumer foots the bill. How's it different from paying the worker more and asking for more money upfront?

Different because now list price of a sandwich is $8.99 instead of $14 that customer will actually pay. Hotels, resorts, restaurants, tours etc are master at this. Even after knowing these add-ons people fall for it often enough to keep this practice running.

Besides economists think positively of this so it has support not just from interested parties but officials, think tanks etc.

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

#419

Post by micromacrofoot »

reissbaker wrote: post #177
lawlessone wrote: post #19

Earlier quoted context omitted.

it's indirect tax credits for businesses that don't want to pay workers.

No, it isn't. It doesn't affect the wage they have to pay them. It just affects whether the employees need to pay taxes on tips.

it will absolutely affect the wage they are paid, it will be used as a constant excuse to not pay more than the legal minimum (2.13/hr as long as tips are greater than $7.25/hr)... probably used to justify additional tip stealing that happens pretty much everywhere, people will tip less because of it

servers are treated like absolute garbage

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

#420

Post by potato3732842 »

ourmandave wrote: post #280
beefnugs wrote: post #66

Earlier quoted context omitted.

like being president, and getting crypto tips from supportersuckers

It's amazing how the Saudis managed to fit a 747 into a tip jar.

You have to give them credit for the biblical metaphor.
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