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

“No tax on tips” is an industry plant

newyorker.com

Post reply on HN
Print view View original

561–570 of 618 posts

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

#561

Post by 9rx »

danudey wrote: post #545
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 wit…

> require servers to be paid minimum wage

There is no jurisdiction in the US that allows servers to be paid less than the standard minimum wage. Even where you find server minimum wages (your $2.50/hr example, although not all states allow this) the employer is required to top up to the standard minimum wage if tips don't cover the difference.

Which makes this kind of silly,

> If you're making $2.50/hr plus tips then I think you deserve a break and not taxing tips is a sensible break.

If $2.50/hr + tips exceeds minimum wage, why do you need a special break? You're making more than other minimum wage workers. If $2.50/hr + tips does not add up to minimum wage, the employer has to get you to minimum wage, so you are making no less than someone else making minimum wage.

If people with low income need a break, just give people with low income a break. How that low income is derived is irrelevant.

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

#562

Post by godelski »

kelnos wrote: post #224
godelski wrote: post #52

Earlier quoted context omitted.

> 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 amoun…

You keep posting this over and over as if states with a lower tipped minimum are equivalent to states with the same minimum, regardless of tips. You're not wrong that, in states with a lower tipped minimum, the tips act as a credit. But you're ignoring what the power imbalance in those situations can do to an employee, and you're ignoring the fact that in states like that, tips paid by customers are effectively subsi…

I hear you, but your solution sounds defeatist. Like there's nothing that can be done.

  > tips paid by customers are effectively subsidizing the employer out of paying minimum wage.
Not effectively, literally. That is what a credit is.

But I'm making sure that the conversation is clear that anyone not making minimum wage is suffering from wage theft. We have to identify the right problem if we want to fix it.

  > As a customer, I would much rather know that the employer is paying the full fair minimum wage regardless
I also like this idea. I don't think there should be a wage credit. It is helpful to reducing wage theft. While I would, personally, get rid of credits I don't think I'd get rid of tipping all together. Certainly at least not until there's a better minimum wage rate.

  >  I don't want to be paying a part of the employee's wage that the employer would otherwise be paying.
You're always doing this. Either your money goes directly to the employee or is going to the employee through the intermediary of the employer. In the case you are not directly paying the employee you're paying the employer.

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

#563

Post by WaitWaitWha »

Just a historical note as a consolidated response to those who identify 'tipping' as an 16th through 20th century invention. This is incorrect as humans had 'tipping' all the way back to earliest recorded times.

In the middle ages vails or informal rewards were given to well performing servants. In the Roman times corollarium (Lucilius, Seneca), a form of tipping was known. Cicero referred to tipping as stipen although some argue that is not above regular pay.

There are some evidence that in the Han Dynasty, gifts were bestowed on well performing eunuchs, above their normal pay. Considering that in ancient times payments often were in non-monetary compensation, this could be considered a progenitor of tipping.

Incas had similar systems of rewarding service with goods like cloth, though not exactly like modern tipping.

Tipping, as we understand it today, likely did not exist in the same form in ancient civilizations, but there were practices where extra gifts or payments were given for exceptional service.

> What has been will be again, what has been done will be done again; there is nothing new under the sun.

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

#564

Post by evo_9 »

kelnos wrote: post #237
evo_9 wrote: post #69

According to my accountant for my wife’s small business (nail and wax salon) this tax law change will have a significant positive impact on her staff. Not sure what to make of this article, it seems pretty disingenuous.

N=1. Just because your wife's business doesn't fall under the conditions that the article is talking about, it doesn't mean that her business is the norm.

Sure, my experience isn’t with sharing, basically. Nice.

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

#565

Post by [deleted] »

crazygringo wrote: post #15
bigyabai wrote: post #2

It's also a joke, because anyone who's worked a service job knows there is no tax on cash tips (wink!)

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.

[deleted]

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

#566

Post by dh2022 »

thuridas wrote: post #96

Aren't we creating incentives for workers abuse: - No tax on overtime: so now making them work 60 hours a week is cheaper for the employer - No tax on tips: so the tip based payment model is cheaper

Not sure how is it now, but when I worked in a plant overtime work was paid at 150% rate of regular pay. Work during national holidays was paid at 200% rate. Isn’t this still the case?

(The workforce at the plant was unionized and the higher rate may have been part of the labor contract. This was in Montreal Canada about 25 years ago. )

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

#567

Post by godelski »

kelnos wrote: post #225
godelski wrote: post #159

Earlier quoted context omitted.

They should. It's easy to report. Doesn't matter if nothing happens right away, because the more reports that accumulate the higher priority it becomes. So instead of trying to tell me how fruitless this is and just give up to endless arguments, maybe report wage theft if you know about it. You can do it anonymously. You can do it for people that tell you. It's not a hopeless situation. Hell, lawyers take payment aft…

It's easy to report, but retaliation is a thing, and is hard -- and expensive -- to prove. Someone subject to wage theft is not the kind of person who can afford that trouble. And it's not like restaurant owners don't talk among themselves. Getting blackballed isn't great. Bottom line is that you seem to think that there's zero reason why people are shy about reporting wage theft. And yet so many people don't want to…

  >  but retaliation is a thing, and is hard -- and expensive -- to prove.
My understanding is that it is fairly easy to prove. If you suddenly have a change in working conditions it is considered retaliation. See the example here[0]. Doesn't matter if you're in an at will employment state. If you get terminated really close to a reporting, well, you'll probably take home more money than you would have by working. It's up to the employer to prove the termination was rightful and they can't just say "because".

It also is not expensive. At least not more than the theft. Lawyers working on wage theft generally take payment as part of the recovery. You pay out of the winnings, not up front.

Honestly, a big part of the problem is that many people have defeatist attitudes. A lot of people don't even bother to make a report after they leave. It is hard to retaliate when you've left.

[0] https://www.dol.gov/agencies/whd/retaliation

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

#568

Post by shazbotter »

g3f32r wrote: post #544
shazbotter wrote: post #188

Earlier quoted context omitted.

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.

I understand their point. What's the minimum a business has to pay for a one hour shift?

That's the point that all the parents above them are concerned with. So a semantic argument is needlessly pedantic.

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

#569

Post by [deleted] »

MikeKusold wrote: post #510
sandmn wrote: post #478

Earlier quoted context omitted.

Is the definition of a good server in this case one who can serve more tables than others in the same amount of time? In most places tips are mandatory and % does not depend much on anything unless someone messed up. Commission on sales is very different from restaurant tips.

The final cost of the bill matters more than anything. A server at a higher-end restaurant where the bills regularly exceed hundreds of dollars will earn more in tips serving fewer tables than a server that works at a cheaper casual-chain restaurant (IHOP, Applebees, etc).

[deleted]

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

#570

Post by tmiku »

sandmn wrote: post #478
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…

Is the definition of a good server in this case one who can serve more tables than others in the same amount of time? In most places tips are mandatory and % does not depend much on anything unless someone messed up. Commission on sales is very different from restaurant tips.

More so than tables per unit time, it's dollars per unit time. When I was a server, the usual metric of how well you performed on a given shift was the total of your bills ("how much you sold"). The best servers were good at encouraging parties to spend on the things they were on the fence about: the appetizer, the second drink, the dessert. Even with the volatility of individual tipping decisions, getting your tables to order more increases the EV of your total tips.
Post reply on HN