alt Hacker News“No tax on tips” is an industry plant
Comments
Some interesting points: ~40% of tipped workers don't make enough to get taxed anyway, no tax on tips would actually advantage better paid workers like casino dealers who don't need the help. NToT is described as a campaign to distract from minimum wage increase initiatives.
Don't forget to reduce your tips by the percentage they were previously being taxed, since it is all charity anyway.
Hopefully this becomes another straw that will eventually break the camels back and we get rid of tipping all together. Every restaurant in the world does not need tips to survive, except for the ones in the US.
What confuses me most is when you are given the option to give a tip before any service has been given. On deliveroo, for example, I have the option to tip the driver while I'm at the checkout. Why would I give a reward for good service when I have no idea if the service is even good? There's already a rider fee as part of my bill, so it doesn't make any sense to me to give them more money at that point
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.
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.
> 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 can earn a lot more money than what they’d earn if every server were paid the same, fair wage.
My mom used to work at a furniture store as a floor sales associate on commission. She would regularly clear $120,000/year (this was 15 years ago, so like $180,000 today). A generous wage for the job at the time probably would’ve been $50,000 or so. She would’ve fought such a policy tooth and nail.
For example, Amazon caught lowering delivery driver pay with the tips making up the difference and then lying about it: https://www.ftc.gov/system/files/documents/cases/amazon_flex...
> At the outset of the Amazon Flex program, from 2015 through late 2016, Amazon paid drivers at least $18 per hour plus 100% of customer tips
> Beginning in late 2016 ... Amazon secretly reduced its own contribution to drivers’ pay to an algorithmically set, internal “base rate” using data it collected about average tips in the area ...
> For example, for a one-hour block offering $18-$25, if Amazon’s base rate in the particular location was $12, and the customer left a $6 tip for the driver, then Amazon paid the driver only $12 and used the full customer tip of $6 to reach its minimum payment of $18 to the driver.
And their punishment was just to pay back what had been taken: I can't imagine there are many other opportunities to steal $61m with the only punishment when you're caught is having to pay it back.
My tips have been going down progressively, when I moved to the US I was taught 20% is "normal", now I tip 15% at MOST at restaurants and at MOST 5% on take out.
I'm tired of being shamed to pay more for less.
Also whoever was in charge of teaching staff to "turn away in shame" when the tipping screen is shown needs to go to some sort of gulag.
You know what would actually help workers in tipped positions? Going after wage theft. Taxes on tips are a drop in the bucket compared to wage theft.
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
It is interesting that the no tax on tips would expire in 2028, while the tax breaks, most affecting the wealthy, were made permanent in the same bill. A bit of political game i'd say.
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.
I never understood tips...
You have a farmer that grows/raises food, butchers and others that 'process' it, you have a team of cooks who prepare/cook the food, and you're supposed to tip the the person who just brings the foor from the kitchen to your table, maybe 20, 30 meters away?!
Sadly, tipping is sprading all over europe too with POS terminals bothering you more and more often for tips.
I’ve finally eliminated all tipping in my life for anything that isn’t sit down restaurant service or an uber ride, and I’ve stopped using delivery apps to instead just pick up food myself.
At first it feels shitty hitting 0 or “no tip” on a payment machine but after the first several times it feels empowering and I doubt employees give a shit anyway. Just do it.
I can kind of see the average traditional service work position to shift into a Uber-esque model where you are a essentially a gig contractor. The worker takes the full risk for slow days, and the business owner does not have to pay you a salary, as everything comes from the customer.
I, personally, believe tipping is detrimental because it encourages preferential treatment. When workers know someone is a generous tipper, they often provide better service to that person than to others who tip more modestly.
In many cases, tipping functions like a form of bribery, incentivizing employees to offer favors or services beyond what is appropriate, which can come at the employer's expense.
It can also create resentment toward customers who don't tip, leading workers to offer poor service and fall short in their duties.
> "we are going to not charge taxes on tips"
It's been a very long time since my last visit to the USA. I probably paid tips in cash back then. I would assume that workers can chose to never report those tips as income, or not all of them, so no taxes. But if everybody went cashless by now, customers probably pay the restaurant, the restaurant pays the tips to the workers and all of that money is tracked and taxed. Is that correct?
The most galling part is how the industry manages to manufacture worker consent through PR spin and management plants in hearings
My daughter works at a mid-tier restaurant 35 hours a week and makes more than my wife who is a math teacher, department head, and has many years of teaching experience.
Eliminating tips and increasing the base wage is a stupid idea. All the talented servers who love the job will leave and mediocre people will replace them.
Doesn't this also open a huge opportunity for tax evasion?
Say I am a small business owner selling a $90 item which is $100 with state sales taxes. I say if you are willing to tip me at least $90, the item is $1. The buyer saves $9 from state sales taxes, and I save on income taxes because tips are exempt from tax.
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 like people want to tax tips, and increase the minimum wage, which is evidence of a kind of authoritarianism that I did not expect.
Tax on real tips i.e. cash was already unenforceable, but perhaps it's nice to codify it. Then again, it feels like just another step to shift transactions away from cash.
Bribing a driver in order to receive an order accurately seems archaic.
I’ll drive there myself, thanks. My pup gets a ride. The apps get the finger. The drivers get what they deserve.
Wins all around.
“No Tax on Overtime” ditto. As I understand it if it’s overtime negotiated through a union contract, you’re out of luck.
Why don't yall ask the tipped workers if they are happy or upset about having no tax on tips?
How is an expected tip different from a commission other than who pays?
This is rather brilliant. * make it look like the government is stealing “gifted” money * stop taxing it * turn as many jobs as possible into tipped jobs supposedly for the person’s benefit * really the employer wins since they’ll pay less and claim “tips”
It's also a joke, because anyone who's worked a service job knows there is no tax on cash tips (wink!)
"No tax of tips" is one of the most brilliant political ploys ever. You really gotta give Trump credit. It doesn't really cost anything, businesses love it, and you can trot it out as a victory for the working class while you screw them on their health care or energy costs.
Tips are the most cynical thing I've ever seen.
Tips are supposed to be "in return for a service, beyond the compensation agreed on" (WordsAPI).
If tips instead mean "it's something you have to give when you had no problems with the service provided", and you expect routinely not to have problems with such service providers, then it's implicitly agreed that tips are required, so they are not tips anymore.
It’s simpler than that. It’s gross vote buying and political patronage. Nevada has a large population of tipped service workers. Trump won the state by the largest margin for a Republican since W. Bush in 2000 (back when the state was 65% non-hispanic white versus 45% today). It was probably instrumental in Trump winning hispanic men nationally.
All this is just the result of playing a zero sum game with industry that is traditionally very low margin. The money always comes from somewhere.
I’d honestly like to hear from someone who is a proponent of tipping how they think it makes any sense. By that I don’t mean I need the reason for tipping explained to my, everybody understands the argument for why you should tip: but how does it make sense when you consider who you tip and who you don’t?
this is why we need to end this ridiculous tipping culture
I worked as a server for about a year in college, and when we would check out at the end of the night, literally, everyone would just put zero. As in they didn't earn anything. Every time. I'm sure it mess with the taxes in someway or another.
I never put a tip in at a kiosk.
Stonk grants and options are tips too - no tax thanks.
Yeah we just had to sell out medicare, bomb Iran, destroy USAID, and now restaurant workers can blame the public more for their thief employers not paying them a living wage. I have happily nearly eliminated eating out partially because tipping has become ridiculous but restaurant prices are still very high post-pandemic. Fuck tipping.
Trump is clearly the most powerful president of all time, and he basically controls everything.
I think with any conversation about tips it is really important to recognize that laws vary dramatically across states[0]. I think talking about this can really drive at the real underlying issues with tipping.
IMO most discussions about tipping are a distraction. "Divide and rule" if you will.
== THE LAW ==
(or my best understanding. IANAL)
For most of the west coast (AK, CA, OR, WA): there is no separate "tipping wage". Tips are *always* on top of *at least* state minimum wage. There is only one minimum wage, so tipping is always a "bonus".
Other places, there are two "minimum wages", but that's confusing because at the end every employee has to make at least the normal minimum wage. The difference is that employers can use tips as credit against this. So, with the exception of Georgia (WTF GA!), employees *must* make the state's minimum wage (default federal). Using federal (min wage = $7.25) an employer *MUST* pay you *no less than* $2.13/hr. This is conditioned that you have made *at least* $5.12/hr in tips. The problem here is what tips count to what wages. Per day? Per week? Per paycheck? DOL says "workweek"[1]
============
I've heard stories of employees not getting a paycheck "because employer thought it was all tips" (illegal b/c they credited too much) or very small paychecks with the explanation that the employer over-credited tips. There's at least a decently straight-forward way to show what can be credited, and this is why there's the tip amount that you log. Ignoring cameras, the burden is on the employer to prove that they can make these credits, so that line-item on the bill is important (IANAL)
Personally:
So I think 90% of discussions around tipping end up just being a distraction to create a fictitious divide of "minimum wage workers" vs "tipped workers"[2] who should instead be working as a coalition to increase the floor. They are both minimum wage earners! The main difference is primarily that tipped employees are just more likely to suffer from wage theft, due to how they are paid. But that's also something that both experience, just at different rates.
TLDR:
Getting rid of tips as a concept is a simple solution to the wage theft problem, but isn't the real problem just good old fashion wage theft? (second problem being "is minimum wage minimum"?)
[1] https://www.dol.gov/agencies/whd/fact-sheets/15-tipped-emplo...
[2] Simplifying by ignoring tipped earners with higher than min wage base pay (we can extend as needed)
[dead]
[dead]
[flagged]
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.
Two steps short of legal prostitution. Maybe the worst idea from the administration so far. Time to build the app…
I don't like tipping as much as the next guy, but this isn't about that. It's about government overreach and privacy.
Governments tracking small transactions like tips and taxing them should bother everyone. That rag, the New Yorker, knows that of course.
https://archive.is/20250731232051/https://www.newyorker.com/...