I know we have multiple threads talking about taxing tips, but there hasn't enough discussion about what this could actually do to tip earning jobs.

Most people would agree that tip culture has gotten out of hand in this country. People now ask for tips where they didn't before and the average tip size is increasing.

It seems logical to me that removing tax on tips will only exacerbate the issue. More business would gladly restructure their employee pay to facilitate tipping (including places where we don't see it today) and more people would be drawn to tip paying jobs. I foresee a future where any service orients job leans more heavily into tipping, even (and maybe especially) sole proprietorships… Tipping for accountants, plumbers, electricians, etc.

It seems like an easy way to game the system and create haves and have nots, even for the people that don't need it.

And yes, I get that tipping is, by nature, optional. But for some jobs, it's expected unless the service is truly terrible. I could totally see a period of desensitization after which it becomes expected for more and more professions.

Jeeper79 said:

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I know we have multiple threads talking about taxing tips, but there hasn't enough discussion about what this could actually do to tip earning jobs.

Most people would agree that tip culture has gotten out of hand in this country. People now ask for tips where they didn't before and the average tip size is increasing.

It seems logical to me that removing tax on tips will only exacerbate the issue. More business would gladly restructure their employee pay to facilitate tipping (including places where we don't see it today) and more people would be drawn to tip paying jobs. I foresee a future where any service orients job leans more heavily into tipping, even (and maybe especially) sole proprietorships… Tipping for accountants, plumbers, electricians, etc.

It seems like an easy way to game the system and create haves and have nots, even for the people that don't need it.

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I think there are rules as to what kind of jobs qualify for being tipped employees. It would be difficult for most businesses to actually convert any jobs to them.

Now, I agree that more people would be drawn to tipped jobs...

I'm reminded of things like cruise ships or restaurant parties over 8 people where the tip is basically mandatory. But then it's not even a tip anymore, is it?

It would be a simple maneuver to restructure a service business's fee structure to incorporate mandatory tipping for that sweet tax benefit.

Just stop tipping if you want to opt out of the system. I was happy to tip huge amounts during COVID to keep business open and help people pay bills but it got out of hand. I don't have any shame around hiring "$0" at places with no real service. Amazing how much $ is saved.

Lower taxes are always better.

I am going to start asking to see the w3 and see that these tips are reported before I self tip again. No w3 no tip.

techno-ag said:

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Lower taxes are always better.

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Even when the government is picking winners and loser, including in the middle class? Even when it basically creates a loophole for how customers are charged?

There are service jobs where the tip model works extremely well - like waiters/waitresses. Sets up a meritocracy where good performance is directly rewarded. If you dont think so, visit some restaurants in countries where tipping isn't a thing.

Not to say it's perfect or that tipping scope creep hasn't gone too far, but there are some jobs that it is far superior for

techno-ag said:

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Lower taxes are always better.

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A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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Even when the government is picking winners and loser, including in the middle class? Even when it basically creates a loophole for how customers are charged?

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Too much control over people.

I stayed at a Hilton Hotel recently and the tip was already in the bill. I forget what % they used but I think it was about 20% whether it was breakfast or the swimming pool bar.

Then they had a line to add more tip.


If tips aren't taxed you could do this with dsmn near anything.

Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

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LOL if you think we can erase the national debt with higher taxes.

Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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Even when the government is picking winners and loser, including in the middle class? Even when it basically creates a loophole for how customers are charged?

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Lol. Unless you are arguing for a flat tax you can pound sand with this argument. These people the "loophole" involves already have giant loopholes that exempt them from all taxes. The only difference is that it's handled up front with this new proposal, instead of given back to them as a refund.

techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

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LOL if you think we can erase the national debt with higher taxes.

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I didn't say higher taxes, did I? Man, what is it with y'all putting words in other people's mouths lately??

We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

Jeeper79 said:

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techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

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LOL if you think we can erase the national debt with higher taxes.

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I didn't say higher taxes, did I? Man, what is it with y'all putting words in other people's mouths lately??

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The part where you advocated tax revenue as part of the solution to the national debt, which is currently an issue at present levels, is a direct inference my friend.

techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

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LOL if you think we can erase the national debt with higher taxes.

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I didn't say higher taxes, did I? Man, what is it with y'all putting words in other people's mouths lately??

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The part where you advocated tax revenue as part of the solution to the national debt, which is currently an issue at present levels, is a direct inference my friend.

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Or cut spending.

Unless you think we can cut taxes and reduce the debt at the same time. Or you just don't care about the debt anymore, but that's not very conservative.

Does anyone really think most tips are reported to the IRS. i think this is not that significant.

MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

DrZ said:

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Does anyone really think most tips are reported to the IRS. i think this is not that significant.

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Yet.

DrZ said:

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Does anyone really think most tips are reported to the IRS. i think this is not that significant.

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The IRS assumes a certain level of tipping based on the meal prices waitstaff delivers. That's part of the issue. Waitstaff have to pay taxes on that even if they did not receive tips, IIUC.

Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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Yes I did…and I can choose not to tip and if it is baked into what I am buying, I can choose not to purchase said good or service.

Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

MelvinUdall said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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Yes I did…and I can choose not to tip and if it is baked into what I am buying, I can choose not to purchase said good or service.

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Fair enough. Unless it becomes unavoidable. And maybe it doesn't, but it sure seems like there's a real risk that it could.

Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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That is a VERY good point.

Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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Its all in the OP but I'll break it down further.

Say you make $100k as a plumber. Now let's say you add a 20% mandatory tip line to the bill and reduce the core price by 20%. That's essentially legalized tax evasion, is it not? I guess someone could choose to bring the tip portion to $0, but how many people would?

Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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Its all in the OP.

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Your OP is illogical. You are saying that it's unfair that the people who already don't pay anything in taxes will have a loophole allowing them to not pay anything in taxes. The only difference is that the IRS isn't needed as much with the proposed solution. Which means a net reduction in government spending.

Definitely Not A Cop said:

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Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

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Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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Its all in the OP.

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Your OP is illogical. You are saying that it's unfair that the people who already don't pay anything in taxes will have a loophole allowing them to not pay anything in taxes. The only difference is that the IRS isn't needed as much with the proposed solution. Which means a net reduction in government spending.

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The whole point is that opening this loophole risks expanding tipping beyond low paying food server jobs. It's a pattern we're already seeing more of and this could make it worse.

Jeeper79 said:

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techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

---

A little off topic, but I'd mostly agree with you if we weren't already getting crushed under so much national debt. As it stands, though, I subscribe to the Lanister model of debt repayment and that requires tax revenue.

---

LOL if you think we can erase the national debt with higher taxes.

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I didn't say higher taxes, did I? Man, what is it with y'all putting words in other people's mouths lately??

---

The part where you advocated tax revenue as part of the solution to the national debt, which is currently an issue at present levels, is a direct inference my friend.

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Or cut spending.

Unless you think we can cut taxes and reduce the debt at the same time. Or you just don't care about the debt anymore, but that's not very conservative.

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Yes, this is the only way we can get there, but no Democrats and few Republicans have any interest in cutting spending. We can't even reduce the rate of growth without hysterics about starving children or old people.

Going to a Sales tax without income taxes is the only sane answer yet most people just can't imagine it. Income taxes are so counterproductive and inefficient with the real winners being politicians that use them to manipulate you by rewarding or demonizing different groups of people. It's just they are so ingrained that people can't fathom life without them and that only empowers them more.

Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

---

Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

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What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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Its all in the OP.

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Your OP is illogical. You are saying that it's unfair that the people who already don't pay anything in taxes will have a loophole allowing them to not pay anything in taxes. The only difference is that the IRS isn't needed as much with the proposed solution. Which means a net reduction in government spending.

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The whole point is that opening this loophole risks expanding tipping beyond low paying food server jobs. It's a pattern we're already seeing more of and this could make it worse.

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The loophole is already open. Your OP is pointless. If it were going to happen, it already would have. Nobody is tipping at McDonalds. If they tried to go to this, they would still end up having to pay minimum wage to cover the lack of tips to these employees. They would then continue losing workers to chains like Chick-fil-A that offer well above minimum wage for the same job with better customers.

Violence over tips results in Tipper Gore.

Jeeper79 said:

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I know we have multiple threads talking about taxing tips, but there hasn't enough discussion about what this could actually do to tip earning jobs.

Most people would agree that tip culture has gotten out of hand in this country. People now ask for tips where they didn't before and the average tip size is increasing.

It seems logical to me that removing tax on tips will only exacerbate the issue. More business would gladly restructure their employee pay to facilitate tipping (including places where we don't see it today) and more people would be drawn to tip paying jobs. I foresee a future where any service orients job leans more heavily into tipping, even (and maybe especially) sole proprietorships… Tipping for accountants, plumbers, electricians, etc.

It seems like an easy way to game the system and create haves and have nots, even for the people that don't need it.

And yes, I get that tipping is, by nature, optional. But for some jobs, it's expected unless the service is truly terrible. I could totally see a period of desensitization after which it becomes expected for more and more professions.

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I would say yes, people would try to manipulate the system to convert taxable wages into untaxed tips.

Definitely Not A Cop said:

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Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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Definitely Not A Cop said:

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Jeeper79 said:

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MelvinUdall said:

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We are taking about not taxing tips…sure could there be repercussions, yes, but really it would be insignificant at best.

---

Did you read the OP? The risk is that it creates a loophole and you start seeing more tipping which wouldn't be insignificant.

---

What new loophole? 99.99% of waiters already don't pay anything in taxes. It's all refunded to them.

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Its all in the OP.

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Your OP is illogical. You are saying that it's unfair that the people who already don't pay anything in taxes will have a loophole allowing them to not pay anything in taxes. The only difference is that the IRS isn't needed as much with the proposed solution. Which means a net reduction in government spending.

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The whole point is that opening this loophole risks expanding tipping beyond low paying food server jobs. It's a pattern we're already seeing more of and this could make it worse.

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The loophole is already open. Your OP is pointless. If it were going to happen, it already would have. Nobody is tipping at McDonalds. If they tried to go to this, they would still end up having to pay minimum wage to cover the lack of tips to these employees. They would then continue losing workers to chains like Chick-fil-A that offer well above minimum wage for the same job with better customers.

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Expand your thought process beyond minimum wage food service jobs.

Jeeper79 said:

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techno-ag said:

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Lower taxes are always better.

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Even when the government is picking winners and loser, including in the middle class? Even when it basically creates a loophole for how customers are charged?

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The majority of them are paying minimal federal income taxes if any.