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Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?

127 points| howard941 | 1 year ago |theguardian.com

219 comments

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[+] afavour|1 year ago|reply
IMO it's just bad policy all round without a significantly higher level of detail. For example, how do we classify a tip vs a wage? If we're not very, very specific about it's going to be yet another tax loophole exploited by the rich who will pay each other $1 for work and then 'tip' thousands more.

Sure you’re an engineer on staff now but wouldn’t you want to be a freelancer, paid minimum wage and then a healthy “tip” every two weeks? Win win: I don't pay for benefits, you don’t pay tax.

No tax on tips can be sold as a benefit to the working poor while the small print can be written to favor the rich… no wonder politicians of all stripes are clamouring for it.

[+] tmaly|1 year ago|reply
I would much rather see a simplified tax system.

We still have the carried interest loophole. Warren Buffett's secretary is still paying a higher tax rate than him.

There has to be a better solution than this massive tax code that keeps growing year after year.

[+] giantg2|1 year ago|reply
Even not getting into those potential future abuses of the system, there are already some high tip earners such as some exotic dancers (median income $75k). So it wouldn't be helping only low income.
[+] mlyle|1 year ago|reply
On the other hand, requiring taxes to be paid on something that is really hard to enforce for some segments of the workforce is also bad policy.

IMO there's a need for some nuance here.

[+] amy-petrik-214|1 year ago|reply
thing about tips is I'm sure a large portion of tipped people just pocket the cash & don't report it - missed tax revenue. So if they just say, "pocketing it is legal", what tax revenue was lost? Some, but not as much as say a salaried tax cut.
[+] websap|1 year ago|reply
We're moving to a world that most restaurants won't have servers taking your food and drinks order. This is already happening in Seattle, multiple spots are now counter style ordering, you order, get a number and someone just comes from the kitchen to deliver the food. Some of them also have a QR code associated with your number which you can scan to order follow up items. Tipping more than 10% for counter style ordering doesn't make sense to me, because I don't even know who is receiving the tip?

The American Economoy just cannot support servers given the rise in cost for doing business and changes in consumer behavior due to inflation. Servers will be soon available only in the "nice" restaurants.

[+] teeray|1 year ago|reply
> We're moving to a world that most restaurants won't have servers taking your food and drinks order. This is already happening in Seattle, multiple spots are now counter style ordering, you order, get a number and someone just comes from the kitchen to deliver the food.

I honestly love this. At my local brewery, you just walk in, take a free table, scan the QR code on the table, order & pay (with apple pay), then your beer and food shows up. When you're done, you get up and leave. Multiple people / weird check-splitting? No problem, each party just scans the code separately.

[+] whartung|1 year ago|reply
The local McDonalds, when you walk in, you see 3 large screen order kiosks, and 2, essentially, empty counters. One with a register.

And that's it.

There's no beverage bar, no condiment bar, there MIGHT be napkins, but I can't recall.

You order from the kiosk, which has a cash machine to accept cash, and if its to eat in, grab a table tent and type in the number. Otherwise, you just take the number on the receipt. Eventually someone will bring it out on the other counter without the register and call out your number.

If you're eating in, eventually someone will come to deliver the food -- typically in a bag, just like everything else.

You could order at the counter, but there's no one in sight. You either have to just wait for someone to saunter by or shout out into the void.

Similarly, if you want a refill on your beverage. They'll happily give you one, again, if you can actually track down a worker.

It's quite a sterile experience. At least at the drive through you talk to people.

I understand that its a company wide goal to transition all of the restaurants to this model.

[+] princevegeta89|1 year ago|reply
If you ask me, tipping more than 0% for counter style ordering where there is no dedicated waiter involved makes no sense.

Even worse are the coffee shops - if you think getting a coffee is just a few bucks and is relatively cheap, note that you get robbed when you end up tipping. $1 or more tip on a $5 coffee. And there is nothing special you get, the baristas are just doing their basic job. Also the looks you get when you select the option "no tip" or the 0% tip, don't make it worth anything at all.

I stopped going to coffee shops a long time ago.

[+] giantg2|1 year ago|reply
When you tip your server you might not know who gets it either. There are things like tip sharing and even tip pooling.
[+] vips7L|1 year ago|reply
If I order standing up I’m not tipping. It’s that simple.
[+] oceanplexian|1 year ago|reply
> We're moving to a world that most restaurants won't have servers taking your food and drinks order. This is already happening in Seattle

Seattle isn’t the world, it’s not even representative of the USA. Like California they have enacted regulations and policy which resulted in widespread crime and homelessness, the shuttering of small business, and population decline.

The reason you have stuff like robots taking orders or kitchen staff waiting tables isn’t because the progressive utopia has been realized, it’s because there is no such thing as free lunch and those people got fired and kicked to the curb while the remaining employees were forced to do more work.

[+] kitkat_new|1 year ago|reply
tips should be banned

not only is it a shitty source of income, it also exposes you to sexism, racism and makes you tolerate shit things, because your income could be at risk standing up for yourself.

[+] next_xibalba|1 year ago|reply
Have you ever worked a job where you get tipped? I have. I was both a bartender and a server and my income was far better than both 1) the alternatives for which I was qualified, and 2) what my income would have been on flat, higher wage. If you haven't worked a job like that, it might be worth talking to people who do or have.
[+] throw_m239339|1 year ago|reply
In some cultures, people "tip" teachers, police officers, doctors, politicians, judges... you know where I'm going with that...

I'm not saying tips should be banned but there certainly is a "cultural aspect" to tipping...

[+] bcrosby95|1 year ago|reply
I dislike this proposal. Just like I'm not a fan of $20/hour minimum wage for fast food in California. I don't see why we should hold service workers that get tips, and in California's case, those that work at fast food, above other wage earners.

It feels degenerate that the government is signalling to us that we should e.g. work in fast food and as a waiter over preschools and child care.

[+] jerlam|1 year ago|reply
Especially in states like California, where there is no separate lower tipped wage for anyone.
[+] Simulacra|1 year ago|reply
Well, for one the SEIU is a significant political voting bloc that no politician or business wants to cross
[+] flerchin|1 year ago|reply
It needs to be clear if I'm shafting a sub-minimum wage worker, or declining an egregious tip-ask at the self-check counter.
[+] hoosieree|1 year ago|reply
If you must tip, only ever use cash. Otherwise you're also subsidizing Square, Toast, Visa, Stripe, etc. Did they give you exceptional service today? Use cash.
[+] jgwil2|1 year ago|reply
You're never causing a sub-minimum wage worker to get less than the minimum wage, because their employers are required by law to make up the difference if they don't make minimum wage with their tips. You're only "shafting" them in the sense that they are expecting to do far better than minimum wage.
[+] imgabe|1 year ago|reply
Don't tip standing up. If you're ordering at a counter, that's not a tipped job. What are you even tipping for anyway? You haven't gotten your food yet, they're not bringing anything to you, it makes no sense.

If the conceit of tips is that they incentivize good service, then tipping before you receive the service is nonsensical.

[+] OptionOfT|1 year ago|reply
Tips, and in general, taxes and fees should become part of the advertised. It should not be on the consumer to be guilt tripped into paying for a living wage of server, nor to be guilt tripped into a 3% healthcare surcharge, or to be deceived by seeing a price advertised, only to have to pay a whole bunch more because of added fees.

I can understand the justification for taxes to be separate, I don't like it, but I get it.

But the 'fuel surcharge' / 'healthcare fee' / ... should be part of your price. How can I compare 2 places if they get to advertise super low prices, only to make it up with self-imposed fees?

[+] HarHarVeryFunny|1 year ago|reply
The tipping culture in the US has got totally out of control over last 3-4 years.

I'm more than fine tipping low waged people who provide an actual service like wait staff and barbers, but the ubiquitous payment terminals taking over for credit card payment, where the cashier/counter staff expect a 10/15/20% or more tip (some now have 20% as the minimum, unless you go "custom") for doing nothing, piss me off!

What next, will tips for supermarket cashiers be next? CVS checkout too?

[+] jjice|1 year ago|reply
I was at a small train station in New England heading to Boston with a friend a few weeks ago. We each got a bottle of water. $5 each (should have seen that coming), but the real shocker was that the convenience store inside the train station asked for a tip on the terminal. On the $5 bottles of water we picked up and brought to the counter. The absurdity there makes me feel like I'm in Waiting for Godot.
[+] bcrosby95|1 year ago|reply
People got generous during COVID and businesses are trying to take advantage of that and extend it to beyond COVID.

During COVID I would tip my normal sitdown restaurant amount for takeout. But not anymore.

[+] Simulacra|1 year ago|reply
I stopped dining out because of tips. If I get food I pay in cash because I am tired of someone flipping the Clover screen over or holding the card reader in front of me, wanting a 30% tip for doing their basic job. It's gone beyond what is a livable wage and solidly into greed, and manipulation.
[+] nitwit005|1 year ago|reply
Stop using the term "tipping culture". It's not as if people spontaniously decided they wanted to tip more.

What you're upset at is good old fashioned corporate greed.

[+] gs17|1 year ago|reply
I've seen it at self-checkouts. Are you tipping based on how well you scanned things yourself?
[+] laweijfmvo|1 year ago|reply
why would you tip a barber? because they cut your hair good? what was the base payment for then?
[+] numpad0|1 year ago|reply
I'm from culture where tips don't generally exist, at least for common folks. Waiters are paid >=minimum wages, and most don't like pocketing cash at work.

You can just call any of staffers and make orders, around here, in most casual restaurants. You don't have to wait for your waiter to come back around, the guy carrying that platter of steaming hot lobster has his wireless POS tablet that works for any table and he'd be tsk happy to take your orders because he's paid only by hours and not stealing his colleagues' income by doing so.

In restaurant owner's perspective, it makes waiters way more scalable, easier to overcommit, and also reduces loss of sales from I/O timeouts; any workers can notice empty glasses and collect upsells. To waiters, it gives more stable source of income, which may or may not be plenty, but stability is always nice. To customers, it works like mentioned above.

Isn't this better use of everyone's time?

[+] debacle|1 year ago|reply
The US is in desperate need of a labor movement. The Democrats dance with the UAW and are deeply tied to the AFT/NEA, but most labor unions in the US are getting the crap beat out of them and both parties turn a blind eye.

It's good that more unions are speaking with/to Republicans, but what is really needed is a dedicated workers' party.

[+] gosub100|1 year ago|reply
I know this is a naive question, but I don't know why it's so difficult to start a union in the age of online communities. For instance there are dedicated forums and subreddits for e.g. Uber eats and Amazon delivery and Walmart and all the grueling, exploitative jobs. They all have a common thread and viewpoint, why isn't it trivial for them to organize online, pick a date, and one day all "come out" formally as union employees?
[+] seanmcdirmid|1 year ago|reply
I really wanted us to pull back away from tipping culture (to just paying more fairly), but an exemption on tax income is only going to make tipping culture much more pervasive. We already don’t have a sub min here in Washington state, and then we have tips asked for at self service kiosks, when will it end? Now I’ll be expected to tip my car mechanic also?
[+] unsignedint|1 year ago|reply
I really dislike the tipping culture. Don’t get me wrong—I’m all for tipping when someone goes above and beyond. But I can't stand the expectation that a tip is mandatory, rather than something that's earned.

There was this one time at a restaurant where they completely dropped the ball. They brought me a cup of coffee but never came back to take my order, despite me asking. I ended up leaving without eating anything. Of course, I paid for the coffee, but I didn’t leave a tip.

When I mentioned this to some friends who used to work in the service industry, they all said I was the jerk for not tipping. But honestly, I don’t think I was in the wrong.

I visited Australia a while back, and I loved how their bills have a tipping line, but it’s never expected. That’s how it should be everywhere.

[+] beaglesss|1 year ago|reply
What's more likely is some bean counter at the IRS realized enforcing taxes on tips cost more money to enforce than they gained, or was barely break even. It's an easy political win at no risk.
[+] Kon-Peki|1 year ago|reply
I would assume that the implementation mechanism involves reporting tips to the IRS so they can be taxed at a 0% rate, and that you would have to be classified as a non-exempt employee with a maximum hourly earnings rate.

So basically, unreported income remains tax evasion. White collar workers paid via tips is tax evasion. Etc

[+] big-green-man|1 year ago|reply
Is it really a fight? On who's behalf is this fight happening, and who is fighting for it?

I've never met a service worker who relies on tips that wanted to end the practice. Tips seem to be the entire draw to those types of work in my experience. I've never met a tip worker that was doing it over a wage job they'd rather have, unless it was some type of professional salary type gig like they're going to school to become a nurse or something, and in those cases, they're doing tip work because it enables them to make that happen when no other job really would.

Seems to me like the people fighting for it aren't the people living that way and those fighting are fighting on behalf of people who don't really want their help.

[+] MattPalmer1086|1 year ago|reply
I assume business would just lower the amount they pay, since tips would be worth more.
[+] stainablesteel|1 year ago|reply
minimum wage is not a problem

the value backing the currency is the problem, government is spending too much and your cash is not worth anything

the artificial minimum or maximum you're owed is a hoax and only hurts the economy by preventing people from working if they can't achieve that amount, and by hurting the economy makes you poorer by devaluing your currency, meaning what you're paid will be worth less due to the value of the currency, not its amount

[+] Aunche|1 year ago|reply
Increasing the tipped minimum wage means that restaurants will add that cost to the menu. Because tips are based a percentage of your order, this means that customers actually pay more money in tips, even though these laws are marketed as reducing the need for tips.
[+] snapplebobapple|1 year ago|reply
Its a distraction from how stupid minimum wages are and from how chain restaurants probably abuse geographic labor oligopolies to push down wages making minimum wage a less bad policy than the correct policy of no wage controls. We meed to fix both.
[+] Simulacra|1 year ago|reply
It's a distraction from the issue of ending tips entirely. They are not sufficient to live on, creates tension and animosity between service employees and consumers, and lets businesses off the hook from paying an actual wage. Tipping needs to die.