Tipping Gone Mad

[hk blues]

4 hours ago, OnMyWay said:

No tax on tips is just attempted vote buying and this time around both parties are participating.  Similar to college loan forgiveness.

If income is going to be taxed it should be in a fair way.  Even when I was a young leftie I thought not taxing tips was unfair to those of us who work at regular jobs and pay taxes on all our income.

 

When tipping was just what it was intended to be it was fine to exempt it from tax but now that it, in effect, has replaced income in many occupations it is clearly part of income for many.  

[Mike J]

22 hours ago, OnMyWay said:

If income is going to be taxed it should be in a fair way.

It seems that there has never been a agreement on what is "fair".  But hardly surprising considering many people want a lot of government help/programs but want/expect someone else to pay for them. 

[scott h]

24 minutes ago, Mike J said:

programs but want/expect someone else to pay for them

Spot on Mike.

Somewhere, somehow, sometime we went from a "bootstrap" society to a "give me" society

[OnMyWay]

On 9/7/2024 at 11:49 AM, hk blues said:

When tipping was just what it was intended to be it was fine to exempt it from tax but now that it, in effect, has replaced income in many occupations it is clearly part of income for many.  

In the U.S., I always thought not taxing tips was very unfair and basically fell in the same category as "working under the table".  Back in the 70's / 80's it was common to know of people working under the table (cash basis) or only paid in tips, and both paid no taxes.  Employers were never held accountable and enforcement was very weak.  In the digital age now, enforcement is easier.

In the 80's my roommate "D" and his girlfriend / future wife "L" were prime examples.  My roommate was a carpenter and worked mainly for one or two contractors building custom homes.  He would get an hourly lower wage on the books, with taxes, etc. taken out.  Then he would get some wages on a cash basis, and never pay any taxes on it.  The contractor and the employee were both making out on the deal.  Then, in between jobs, my roommate would get unemployment benefits.

"L" was a beautician.  Tipping is big for haircuts and other beauty work.  And they work it for the big tips from their female customers.  The more they smother with customer with complements, the bigger the tips and more return business.  "Wow, you look really good with short hair", "Oh, you look younger with this new facial cream", etc., etc..  L has had some customers for many years, then and now.  She became the big breadwinner for the family.  When she was working for other shops, she declared very little of her actual income for taxes. and she was making some good cash back in the 80's.  60-80k a year back then was a lot.  Then she opened her own shop and the way it works is she basically rents the spaces to the other cutters and also gets a % of sales and/or tips.  She continues to do very well until this day but probably pays more taxes now.

D couldn't take the physical work anymore and he eventually got a legit job as a building inspector for the city.  That worked out well for them, as he got good family benefits like medical and pension.

Anyhow, I was always working either hourly or salaried jobs, and paying full taxes on my income.  It sucked that others lived better than me, and payed very little taxes.

 

[scott h]

10 hours ago, OnMyWay said:

I always thought not taxing tips was very unfair

You know, I really had to sit down and put on my thinking cap on this one  and try and think objectively. At first I though, is it right to tax a performance-based gift? Then I remembered that inheritances are taxed, as are winnings on wheel of fortune or the lottery.

Then I thought, "what's the big deal now? Why is it even an issue?"

A lot of it has to do with a shift in our society I believe. Remember the old days when those working for tips (not counting Go-Go dancers) were primarily wait staff in restaurants? Who were they? Usually, college students working their way through school, single mother (social outcasts at the time), a few spinsters or women trying to supplement their husband's income. 

But who are they now? Still the single mother, but now considered heads of household, folks without a marketable skill who due to modernization cannot find warehouse or factory jobs anymore. When was the last time you saw pimply faced teenager in Jack-in-the-box? Or a 15-year-old delivering papers on his bike?

So basically, they have become a political class, and I say TAX THE ALL!

11 hours ago, OnMyWay said:

Then, in between jobs, my roommate would get unemployment benefits

This guy was not really working for tips, he was just taking advantage of the system and technically breaking the law. People like you and I would rather have a good nights sleep than a guilty conscious. 

[earthdome]

I used to leave a card with my cash tip at a restaurant that said " This is not a tip. This is a personal gift from me to you. Gift's under $10,000 are not reportable as income and are not taxable." 

[hk blues]

1 hour ago, earthdome said:

I used to leave a card with my cash tip at a restaurant that said " This is not a tip. This is a personal gift from me to you. Gift's under $10,000 are not reportable as income and are not taxable." 

That's all well and good but wouldn't satisfy the IRS, I'm sure.  

When the IR in the UK started taxing tips (my mother worked in a restaurant) it was based on a notional fixed amount rather than actual tips received.  The basis was that if you worked in this position you will get tips - how much is impossible to reasonably ascertain so we're assuming x amount for everyone.  So, whether you called it a gift, a tip a gratuity or whatever made no difference.

[OnMyWay]

3 hours ago, hk blues said:

When the IR in the UK started taxing tips (my mother worked in a restaurant) it was based on a notional fixed amount rather than actual tips received.  The basis was that if you worked in this position you will get tips - how much is impossible to reasonably ascertain so we're assuming x amount for everyone.  So, whether you called it a gift, a tip a gratuity or whatever made no difference.

I think the U.S. IRS uses a similar plan now.

[Possum]

On 9/7/2024 at 12:16 AM, Gator said:

Just went in to send a package from a small local post office and sure a s**t there was tip jar! I felt compelled to leave a tip as I was afraid the guy behind the counter would go postal on me

Oddly enough my ex wife worked in the same post office of the first 'going postal' case and we knew the people involved, it was sad on many levels. That being said I think a lot of these tips canisters are just people trying to find out if the general public is actually that gullible. Next time my wife decides to have a gathering here for friends and family I am going to put a tip canister on the back of the toilet. She's planning one for Saturday for her birthday. I'll let everyone know how that works out.

[OnMyWay]

22 hours ago, scott h said:

A lot of it has to do with a shift in our society I believe. Remember the old days when those working for tips (not counting Go-Go dancers) were primarily wait staff in restaurants? Who were they? Usually, college students working their way through school, single mother (social outcasts at the time), a few spinsters or women trying to supplement their husband's income. 

But who are they now? Still the single mother, but now considered heads of household, folks without a marketable skill who due to modernization cannot find warehouse or factory jobs anymore. When was the last time you saw pimply faced teenager in Jack-in-the-box? Or a 15-year-old delivering papers on his bike?

While all that may be true, I think you are overlooking another segment of the tipped workers.  There are a lot of highly desired tipped jobs where the worker can earn a lot.  Wait staff at high end restos can easily make 6 figures on up.  How about a doorman in a big city?  You have to know someone to get the job.  Ritzy hotel workers who stay for years?