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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

#541

Post by jghn »

pixelatedindex wrote: post #529
jimt1234 wrote: post #504

Earlier quoted context omitted.

I think tipping culture has changed a lot in the last 5 years or so, driven mainly by the point-of-sale machines that request tips for seemingly adding no value. I think people have reached the point of tipping fatigue.

Definitely. I also think it has blurred the lines even more, and exposes how arbitrary it is. Do I tip if I scan from a QR code and order, where I have almost no interactions with the server? How is it any different than counter service? All that changed is instead of self-service order it is self-service pickup. I probably still have to flag down a server to get utensils or water. Why did the tip percentage go up fr…

> Why did the tip percentage go up from 15% as the norm to like 18-20%

Why did it go up from 10% to 15% 50+ years ago? And why did it go up from 18-20% to 22-25% in the last few years?

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

#542

Post by jiscariot »

hshdhdhj4444 wrote: post #513

Fascinating how America’s response to people being sick of having to tip on everything, tips being little more than a tax on generosity, was to make this most hated form of remuneration even more advantageous.

Agreed 100%. I will enjoy the creative financial engineering that likely comes with this policy, as we attempt to classify more and more things as gratuity, to escape the reach of the IRS.

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

#543

Post by micromacrofoot »

amosslade wrote: post #472
micromacrofoot wrote: post #419

Earlier quoted context omitted.

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

Good servers are treated well and make good money.

This is nonsense for most jobs, and it's nonsense here too. Very rarely are any jobs treated on pure merit of good vs bad performance. Ultimately it ends up being mostly the luck of having reasonable management and good opportunities. Reasonable management is very hard to come by in the restaurant industry.

And either way, if you wanted to believe the merit-based approach, you're talking maybe the top 5% of servers anywhere making "good" money. Wage theft in the industry is colossal.

I will be pleasantly surprised if the removal of tax on tips does absolutely anything to move the needle for the bottom 95% of servers.

The restaurant industry has been lobbying for this to further avoid the pressure of raising wages and the complication of reporting taxes — the reasoning is out there in the open.

This is the sort of modern shell game where corporate interests further obscure costs to trick the lower class into thinking it's a good deal. It's akin to the math on maintenance Uber drivers tend to fail to do when they're calculating their wages... they're absolutely getting hosed and most of them don't even understand how.

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

#544

Post by g3f32r »

shazbotter wrote: post #188
godelski wrote: post #50

Earlier quoted context omitted.

> Seven states do not have a separate, lower minimum wage for tipped employees All workers, in every state, must be paid at least minimum wage. There's a subtle but important difference in wording. There is no "lower minimum wage" for any employee anywhere. The rule is that employers may credit tips towards pay, up to a certain amount. And they can never credit 100% of pay. So tipped employees should always earn: min…

This is a lot of words for a distinction without a difference.

What's the minimum quantity of money a server can be paid after a 1 hour shift?

If it's the same in both cases, that's his point.

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

#545

Post by danudey »

alphazard wrote: post #534

It's fascinating to see the correlation in opinion between taxing tips and raising the minimum wage. If the prevailing sentiment was to make things easier for low income workers, I would expect people to want to not tax tips, and increase the minimum wage. And people who want less government interference, would want less tax, and lower minimum wage. Those are the two opinions I expected to see. But instead it seems l…

Tips are still income. If we increase the minimum wage so that people can afford to live then I can't see any reason why we wouldn't tax tips also.

If you're making $2.50/hr plus tips then I think you deserve a break and not taxing tips is a sensible break. A better solution would be to prevent restaurants from paying their people poverty wages, and if servers aren't risking starvation and homelessness if they go without tips for a week then why would you not include their tips in their regular income?

Raise the minimum wage, require servers to be paid minimum wage, and enforce a straightforward tax on people's income that doesn't distinguish wage from tips. Maybe also increase the 0% tax bracket to something more reasonable, like $20-40k, just to simplify things for people who are struggling to subsist while we're at it.

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

#546

Post by verall »

godelski wrote: post #50
toomuchtodo wrote: post #28

Earlier quoted context omitted.

Seven states do not have a separate, lower minimum wage for tipped employees. Instead, they require employers to pay tipped employees the full state minimum wage, regardless of tips received. These states are Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Sixteen states use the federal tipped minimum wage of $2.13: Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska,…

> Seven states do not have a separate, lower minimum wage for tipped employees All workers, in every state, must be paid at least minimum wage. There's a subtle but important difference in wording. There is no "lower minimum wage" for any employee anywhere. The rule is that employers may credit tips towards pay, up to a certain amount. And they can never credit 100% of pay. So tipped employees should always earn: min…

I knew someone who worked a graveyard shift at a Waffle House in NC. After their first month, when tips were distributed, they did not make the federal minimum wage, so they had to request additional pay to get to minimum wage (IIRC it was not automatic).

Waffle house then opened an "inquiry" since if they weren't making minimum wage through tips, it must have been because their service was poor (of course it's actually because it was a weekday graveyard shift).

They got their additional $30 or whatever and were then let go.

So while I agree it is illegal to pay less than federal minimum wage, even with tips, but in practice the system is built such that for poor workers in poor areas, they will frequently make less than minimum wage.

Although probably much less nowadays since the $7.25 is still the federal minimum wage and it's pretty hard to find people desperate enough to work for that little money since recent inflation.

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

#547

Post by altcognito »

cafp12 wrote: post #507

Why don't yall ask the tipped workers if they are happy or upset about having no tax on tips?

"Y'all" would be pretty silly to ask a question of little relevance.

Why wouldn't I ask them whether they were happy with their overall compensation, including health benefits, retirement, hours being scheduled, vacation or sick time.

Should I ask those in the back who may or may not be getting the tips from the table?

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

#548

Post by jimt1234 »

pixelatedindex wrote: post #529
jimt1234 wrote: post #504

Earlier quoted context omitted.

I think tipping culture has changed a lot in the last 5 years or so, driven mainly by the point-of-sale machines that request tips for seemingly adding no value. I think people have reached the point of tipping fatigue.

Definitely. I also think it has blurred the lines even more, and exposes how arbitrary it is. Do I tip if I scan from a QR code and order, where I have almost no interactions with the server? How is it any different than counter service? All that changed is instead of self-service order it is self-service pickup. I probably still have to flag down a server to get utensils or water. Why did the tip percentage go up fr…

I'm old. For me, tipping has always been a cash-only transaction because I felt the money going directly into the server's or other staff's pockets. The owner of the business never touched the cash tips, and the tips were rarely reported (for taxes). But now, when I tip with one of those point-of-sale devices, I have no idea where that "tip money" is going - does it ever reach the server or other staff? Does the owner just pocket the "tip money"?

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

#549

Post by danudey »

jklinger410 wrote: post #537
rayiner wrote: post #453

> But, when three members of the group came forward to testify, all expressed support for the Tipped Workers Protection Act and opposition to the One Fair Wage Act, which they portrayed as an effort to steal their tips This article is missing a real issue here by trying to make the story all about the employers. Many workers like the tip system because it creates inequality among the restaurant workers. Good servers…

Servers also know that if tips are outlawed, they will never make that much money again. It's possible for high end bartenders or servers to make over $500 a night in tips. The whiplash of moving into true salary or hourly work is an open secret in the high end service industry. This is why you see some old waiters and bartenders hanging around, when some people consider the service industry "entry level." This is al…

Yeah, if you're lucky you can make a huge amount of money in tips - if you're the right server on the right night at the right place and get the right customers.

You can also, if you're not lucky, barely make anything in tips on minimal hours per week and then have your employer steal half your tips anyway, and then you're basically clearing $4.50/hr for 12 hours a week and probably ending up on food stamps until republicans eliminate those entirely.

Thing is, I've known freelancers who make great money, but even they can have a constant underlying stress about "if the work dries up I'm homeless". Imagine the same thing but instead of the work drying up your manager only schedules you for four hours a day between the lunch rush and dinner and the tips are minimal despite being there for the same hours.

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

#550

Post by [deleted] »

johnisgood wrote: post #181
gambiting wrote: post #173

Earlier quoted context omitted.

>>Actually, let me be more accurate: people who pay with credit card always tip in cash, as there is no way to tip with a credit card. Eh? I don't know if you consider Poland eastern europe(I don't really), but I tip with a card all the time in Poland, you just ask "hey can I leave a tip on the card" and they bump up the amount by whatever you want to tip. And no, the amount doesn't then equal what's on the receipt -…

I tried tipping with card, and they told me that they can't "bump it up" (as in, they will get in trouble if they do). I suppose it depends on the place. I know for a fact that you can't tip with a credit card for parcel couriers. What I do not know for a fact is restaurants. So I suppose it varies. You tip doctors with cash, too. It is illegal to do so, but people do it and doctors expect it, it is just done more di…

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