What do you think about not taxing tips?

It started under Reagan. He’s also the one who started taxing Social Security benefits.

Dumb idea. Been completely unfair to the rest of us who work and have to pay based on our income.

I understand that tip workers are generally speaking lower paid. However, if I have to pay taxes and I have a salary, how is that different from a tip worker who gets money directly from me.

This is a populist idea that is simply unfair to wage earners.

I think tips shouldn’t be taxed. I think of tips as a gift from the customer to the worker. Add to that, there are jobs where there’s an assumption of a minimum tip received (waiter) where there may have been no tip actually received, and there are jobs where there’s an assumption of no tip received (delivery man, service worker like cable company guy, electrician, plumber)) yet they may actually receive a tip, just let them all keep the total and be done with it.

^I agree. I’ve tipped service people for bringing in heavy furniture and moving other stuff around (above and beyond what they were supposed to do) and never expected that they would pay taxes on that gift.
I don’t have to tip, so it really is a gift in my eyes.

I think it’s a good idea. Typically people like waiters/waitresses aren’t paid at minimum wage because they are getting tips. But not everybody tips the same or what is even customary. So their wages are low to start with. Give them a break.

Interestingly, Harris started saying she was all for not taxing tips after Trump came up with the idea and after she saw how popular it was in the polls. This might point to why she hasn’t really come out with an economic plan of her own…she wants to see how people react to what Trump says so she can crib onto those ideas…until (or if) she is elected and then will do whatever she wants.

Tips to moving men never get taxed, do you think they state on their income tax receiving $20 from a customer?

Tips at restaurants are literally part of their regular income, because they are paid less per hour (in almost every state) and our norm in the US is to tip 18% or higher. The majority of the time it’s paid on the credit card and trackable. Anyone getting cash tips probably already is not reporting it, so that isn’t taxed anyway (which I’m ok with some of it going under the table) so in that way that policy doesn’t change much of anything in that one situation, but to say half or more than half of someone’s wages won’t be taxed really isn’t fair to everyone else.

A teacher or employee at Walmart making $40k will be reporting everything and a hairdresser or waiter making the same will be reporting 15%-70% less.

Plus, the first $24k for a married couple isn’t taxed anyway, and lower reported income these people save now, but they hurt their social security pay out when they age.

I wonder when the government estimates taxes lost with that type of policy change, how much less it is into the government.

The whole thing reminds me of Eva Peron promising money to the people.

@seawulf575 I hope you aren’t saying that it’s not ok for politicians from different parties to agree.

So this wasn’t really a question, but a chance for you to state how you are against removing taxes on tips?
I’ll be staying off your questions because you don’t want discussions.

@chyna I’m interested in hearing other people’s opinions.

When I don’t put my opinion people harass me for it. I remember a Q I wrote, “I’ll wait for others to answer before I answer” and a few jellies jumped all over me. I don’t remember if you were one of them.

I wanted to hear answers before I wrote my thoughts. Are you saying I shouldn’t put my opinion at all on my own Q’s?

I might change my mind if there are some good arguments.

Taxing the billionaires properly will go a lot further than sucking the money from the pockets of underpaid and overworked people. Teachers and retail workers should be paid appropriately.

Don’t tax tips. Shitty idea. That’s why I always tip cash, into the person’s hand.

Everybody on this thread who has worked regularly in a tipping profession, raise your hand. (Raising my hand, hear)

@JLeslie Not every waitress/waiter receives tips for every table. Sometimes they get stiffed. Also from what I understand, there’s an assumption of them getting tipped at a minimum level, and they may not get that tip on that level. Not every wait staff is getting 20%. Some get zero. That’s my point.

Also, supposedly wait staff has to share their tips with the bussers and the back of house, and hostesses. I’m not sure if they do all that or are they just supposed to, but from what I hear, they are supposed to. I was never in agreement with that, because hostesses and cooks get a minimum wage whereas wait staff gets a pittance, with the assumption that the wait staff is getting tipped. So take that pittance and tax it and then share it with all these other people – it’s amazing they do ok at all.

@jca2 True they get stiffed sometimes, but they also get more than 20% a lot of the time. A lot of people tip on the total.

Good point about tipping out the bartenders, busboys, etc. I wasn’t thinking about that.

It’s not just one table usually. Let’s say a moderate restaurant they have twelve tables in an 8 hour shift. Maybe 40 customers, average $20 check. $800 in food times 20% is $160 in tips. Let’s say they tip out the others and keep $100. They get paid $6 an hour (this varies a lot around the country. $48 in payroll and $100 in tips on that 8 hour shift. Their tips are a very large portion of their earnings.

Even if you lower it to only 10% tips, 50% of their take home money is tips in this example.

Plus, they do get some cash tips they don’t claim.

Most people don’t tip appropriately for the service, @JLeslie.
A long time ago, a jelly argued against a livable wage because “how hard can it be to carry food?” It sounds like you have that same attitude.
How many years did you spend serving? I’m guessing very few, if any. And if you did, at all, you were much much younger and got out of it quickly.

Tax the extremely wealthy a lot more, leave the servers, hairdressers, etc, alone.

Oh, this is absurd. I’m out.

I can’t believe @JLeslie, that your hill to die on is to tax one of the lowest paid workers in our country, yet the billionaires pay less taxes than the waiters.

@canidmajor Absurd! I worked on my feet for years. I certainly value people who do it and know the exhaustion of working in front of people and not being able to sit down.

@chyna Get serious. I want the wealthy taxed more. I also voted for higher minimum wage in my state. I am not talking about billionaires, I was comparing to teachers and other lower income jobs. I thought you were leaving my Q.

In Europe, tips are not expected by the server. If you want, you can leave something extra if you want, but it isn’t by any means an expectation.

The US is system is the opposite. We have allowed a slave relationship to develop on the part of servers; they need to grovel and abase themselves to get the (maybe) 20% tip these days. I remember when it was a standard 15% not all that many years ago.

The problem is the system, and both restaurants and servers are responsible for it. If this were a sane system, restaurants would build service into the price of the food from the beginning, instead of playing the tipping game.

BUT THAT’s NOT THE POINT of this conversation.

It was originally “should servers be able to evade taxes on their tips”.

And the answer, again, is “they earned the money, they pay the taxes”. All the rest of it (low income, minority, less educated, blah blah) is just sophistry and rationalization.

@Hawaii_Jake I’m interested in what you wrote, but got distracted. Regarding tips, I remember in the 80’s something changed where tips were going to be estimated maybe? My boyfriend was a waiter then, and his brother was a restaurant owner. I remember they just made sure all of the waiters were roughly claiming the same amount so no red flags went up with the IRS or the state.

Do you know about the specific changes regarding the tips? Even before Reagan everyone was supposed to claim all of their income I think. Or, was it actually legal to pocket all tips?

Present day, many more people use credit cards so it’s harder to skirt the system.

@JLeslie If I recall correctly, in the early 80s it became a law where it was assumed that wait staff received a certain minimum level of tips and they were taxed based on that assumption. Of course, if they reported more, they were taxed on the more. Prior to that, if the wait staff received cash and wanted to claim they received zero, the government agreed with that assumption.

@elbanditoroso You make a good point. It goes along with what I said about social security too. The tipping system for wait-staff gets restaurant owners out of paying the wages and also out of having to pay social security on the higher amount if all tips are excluded. It’s a big bonus for business owners not just what it seems at first glance as simply giving a lower wage worker a break.

The average person, especially the average young adult, doesn’t think about how pocketing tax free money hurts their social security benefits in the future.

I was thinking earlier one solution aside from getting rid of the tip system is to give a larger standard deduction off the top on our tax returns, but that lowers the AGI and social security benefits also maybe? I don’t remember if it does. Maybe not.

The ideal would be to pay wait staff a regular wage and eliminate tipping but then the restaurants would pass this cost on to customers, and customers wouldn’t appreciate that.

@JLeslie No, I’m not saying it’s not okay for different parties to agree. But here’s a consideration: if Harris was agreeing why didn’t she credit Trump for the idea? He put it out several days before she did. At some point you have to consider she’s just going with it because it polled really well. She had never talked about it at all before. Agree? Yes, they can agree. Plagiarize for votes? Nope…that is just slimy.
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FIVE more GAs for @jca2

@jca2 customers don’t appreciate being charged an unofficial yet required tip tax of 20% right now.

The customer pays, no matter what.

@seawulf575 I haven’t heard what Harris or Trump said about it, I have only heard the news mention it. I guess if Harris is asked directly if she agrees with Trump on the topic, or if she got the idea from Trump, we can see how she answers. I don’t think it will hurt her at all to say she agrees with him.

Trump probably said it to get the votes of the people who live on tips. They are both being political.

If you want Trump to get credit for thinkng of it first, I am ok with that. I don’t think it matters. From my answers you can tell I am not so sure I am on board with it anyway. Although, I am completely fine with a certain amount of tips not being declared, especially in jobs that are not tipped wage jobs, but rather the employees are lucky when they get a tip here and there.