Taxes on tipping, yes or no?  Why?

 I would like to, if people can manage it, leave out whose idea this is/was/will be as I am not approaching this from a who I like as POTUS stance.  Let's just say the idea came from the IRS at exactly midnight on election night.

 This is specifically about whether humans in geographically recognized US soil that work for less than minimum wage + tips should be taxed on the tips.

 I say yes.  However since the first $11,000 of income is the initial tax-bracket, and for many not-taxed, I would be fine making tips non-taxed at that bracket.  After that the taxes could increase the same as every other tax-paying human.

 If tips become non-taxable at any level, I will start charging $1 for my services and add $4076 per-day gratuity.  This will surely work better for me than just charging $4077 a day.  

 I am sure there could be restrictions on doing something like that, but do we need more legislation and tax-law to police the new tax laws?

 It feels like it would be more efficient to do away with tax+tips wages, however many small service businesses would have to make considerable pricing changes that may make their business unsustainable.  

 What would be a reasonable way to mitigate the impact of such an action?

I vote do away with tips and pay a living wage


 I would like to agree however I do not know how small businesses deal with that.  Will expenses exceed market value due to payroll?  For instance a smaller bar can not contend with Chili's for instance when it comes to volume purchases of alcohol/food.  

 This appears that it would depend almost entirely on customers choosing to pay more for less at a local establishment over a chain restaurant, of which everyone has anecdotal evidence that they, or someone they know, always does this to support small business.

 However the success of chain restaurants shows that the majority will not choose local over price.  Not taxing tips means purchase prices stay more consistent to their current amounts right?  

why would age decide wages for a particular job?
you wouldn't' expect a burger flipper get paid the same as a master electrician..no matter the ages

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioQLw7GMFNKzLUb8LE...

So a 16 year old burger flipper, gets the same as a 26 year old burger flipper, who started flipping burgers when he was 16 ?

 Possibly but you never stated anything like that in your initial question.  

 Since the question is about tippable wages paid under minimum wage, they both will have a considerably similar pay as those scales have zero, or minimal ranges due to law.  

 Livable wage is a huge range.  If a human is ok living in a car, then less than minimum is typically a livable wage.  If they own a few Yachts, livable is considerably higher.  

Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington do not have a tip credit and as such most likely pay tipped workers a "livable wage" as they still get minimum wage.  Federal tipped wages minimum is 2.13

thumperclone wrote on 08/15/24 at 11:11:13:


“Living wage” is a sound bite for hyper partisans or those who can’t grasp macroeconomics.

Allowing for afew exceptions, you don’t want “burger flippers” earning enough to thrive. The manager? Sure, but not the grunts. Those are entry level, transition or 2nd job positions, not as the primary income source for a mature adult.

Allowing for afew exceptions, you don’t want “burger flippers” earning enough to thrive. The manager? Sure, but not the grunts. Those are entry level, transition or 2nd job positions, not as the primary income source for a mature adult.

 I've always wondered why that is.  The only plausible argument I've seen is that fast food is an easy entry job for youth, and if adults do it forever the entry level jobs for youth go elsewhere.  I for one could care less if a human is happy working entry level fast food their entire life.  I have a cousin that makes $22.25 per hour working at Taco Bell.  The pizza place up the road from the medical center pays more per hour than they pay certified EMT's, and entry level techs.

 Should there be laws that require taxation of tips?

 Or should there be laws that eliminate the requirement to pay taxes on tips?