Tips, How "No Tax On Tips" Should effect recommended/expected tip rate."

[Man With A Plan]

The recommended tipping rate has changed over the years. I am speaking for probably the most common situation of tipping at a restaurant, because the tip amount may vary for other tipping situations. I can remember in the 1980's it was 15%. I asked google about the 1950's (before my time) and it was 10%. For quite a while it's been 20%, maybe even 25%.

Perhaps I am a cheapskate for bringing this up, but if Trump's no tax on tips policy is made into law, should we the tipping public consider dialing the standard (and voluntary) tip rate back a little?

Yeah, Joe...you are a cheapskate!

 

[whitehall]

It looks like old democrat waitresses never have a good day during a republican administration even when they don't have to give a percentage of their tips to the government.

 

[White 6]

.

It's not uniform across the industry ... But many establishments have gone to taxing 10-13% of the server's 'bank'.
Since tips are usually voluntary ... Unless certain seating arrangement require an 'added gratuity' ...
They tax lower than 15% (the accepted average standard tip) ... Of the server's bank (total recorded sales).

It's certainly not the most accurate way to handle the taxes ... But closes the gap between what is or isn't reported.

In some cases, the practice was instituted by State Legislatures trying to capture what their losses were ...
And mostly in states that have Balanced Budget Amendments.

.​

Wow. Makes sense, but seems pretty low budget, except for the state coffers.

I would not think it was done much in Tennessee. We have no state income tax. To even bring one up, is the most assured way of losing an election to get into office, or being voted out of office. Tennessee handles its finances well without one.

 

[cnm]

I agre income from all sources should be subject to tax.

But Trump promised to eliminate tax on tips, overtime and social security.
It doesn't cover everybody, but it covers a hell of a lot of people.

What difference does Chump promising something make?

 

[BlackSand]

Wow. Makes sense, but seems pretty low budget, except for the state coffers.

.

It may seem low-budget ... And I don't know how much you know about the food and service industry.

When talking about tips ... We're not just talking about your waitress at a diner.
At an upscale steakhouse ... It's not particularly difficult to make the standard $52.50 tip on a $350 ticket ...
Considering what they charged for the full meal including appetizers and dessert, drinks and the bottle of wine they shared on a four top.

Three to five tables ... Four to six people each ... You can make a decent living.
Some places ... More than six people ... It's a guaranteed gratuity and they just add it to the bill.

The establishment is never going to assess taxes on the total 15% of the server's bank.
It doesn't matter that the server sometimes gets more than 15% ...
Because the server also 'tips out' the bartender, busboys and hostess ...
At least if they still want to be getting a good four top seated ... And the service they need from the other staff.

There's honestly no reason why servers should have some of their income sheltered ...
We certainly don't do the same thing for the janitor that cleans the shitter.

.​

 

[Moonglow]

At least we won't be worrying about tips, and the people that have tips as a major part of their earnings, won't be learning to cheat on their taxes from the get-go.

Why not. I learned to read the law and love playing tax avoision with the IRS.

 

[White 6]

.

It may seem low-budget ... And I don't know how much you know about the food and service industry.

When talking about tips ... We're not just talking about your waitress at a diner.
At an upscale steakhouse ... It's not particularly difficult to make the standard $52.50 tip on a $350 ticket ...
Considering what they charged for the full meal including appetizers and dessert, drinks and the bottle of wine they shared on a four top.

Three to five tables ... Four to six people each ... You can make a decent living.
Some places ... More than six people ... It's a guaranteed gratuity and they just add it to the bill.

The establishment is never going to assess taxes on the total 15% of the server's bank.
It doesn't matter that the server sometimes gets more than 15% ...
Because the server also 'tips out' the bartender, busboys and hostess ...
At least if they still want to be getting a good four top seated ... And the service they need from the other staff.

There's honestly no reason why servers should have some of their income sheltered ...
We certainly don't do the same thing for the janitor that cleans the shitter.

.​

You make very good, informed sounding points. You are correct, in that I am not familiar with that industry, other than enjoying good meals, dining out on occasion.

 

[debbiedowner]

I probably won't change. Those of us that leave cash instead of adding to the credit card bill, assume much of them weren't reported anyway.

You better believe it. I have a few waitresses as clients and if cash is left no reporting and straight into their pockets.

For instance on of them told me her W-2 last year was $39,000 and then snickered and said that didn't include the other $10,000 or so in cash tips. Before anyone says that's impossible it's Florida tourist area and the place the one works at is packed from open until close.

 

[BlackSand]

You better believe it. I have a few waitresses as clients and if cash is left no reporting and straight into their pockets.

For instance on of them told me her W-2 last year was $39,000 and then snickered and said that didn't include the other $10,000 or so in cash tips. Before anyone says that's impossible it's Florida tourist area and the place the one works at is packed from open until close.

.

It's like the 'grocery cart theory' ... And it helps identify the true nature of a person by their own volition.

There is most often no law that requires a person to take their cart to the corral in a parking lot.
Some people do ... Some people don't ... And very seldom is anyone going to say anything about what someone else does.
Almost no one is going to run over there at fuss at someone who just leaves their cart sitting where it is at.

However ... Everyone knows what they are supposed to do.
Everyone knows that some people just don't really care.

It would be interesting to find out how many of the people that just don't care ...
Start caring a whole lot more when they are talking about politics ...
And what other people should be doing with their money.

.​

 

[JoeMoma]

.

It's like the 'grocery cart theory' ... And it helps identify the true nature of a person by their own volition.

There is most often no law that requires a person to take their cart to the corral in a parking lot.
Some people do ... Some people don't ... And very seldom is anyone going to say anything about what someone else does.
Almost no one is going to run over there at fuss at someone who just leaves their cart sitting where it is at.

However ... Everyone knows what they are supposed to do.
Everyone knows that some people just don't really care.

It would be interesting to find out how many of the people that just don't care ...
Start caring a whole lot more when they are talking about politics ...
And what other people should be doing with their money.

.​

Sometimes I shop at Audi. One must put in a quarter to get a cart and the quarter is returned when the car is returned properly. The cart return rate is almost 100%, but is it because of the value of the quarter, or is it because there is more shame to leaving the cart in the parking lot due to value being put in the system?

 

[BlackSand]

Sometimes I shop at Audi. One must put in a quarter to get a cart and the quarter is returned when the car is returned properly. The cart return rate is almost 100%, but is it because of the value of the quarter, or is it because there is more shame to leaving the cart in the parking lot due to value being put in the system?

.

I don't know why people are compelled to retrieve their quarter.
It may be the value of the quarter ... Or it may simply be compliance towards the system.
I would have to ask a control group to come up with any kind of qualitative answer.

What is obvious ... Is that Audi established a system by which they attempted to influence the behavior.
In a broad sense ... A lot of humans prefer structure ... And lean towards systems that encourage compliance.

In light of that ... If you want my unqualified guess on why I think a lot of people comply ... They probably don't think about it all ...
And just do what Audi has indicated as acceptable/desirable behavior ... And is easy enough to accomplish without much thought.

.​

 

[MayorQuimby]

Bullshit. A tip is like a gift. Just like if someone walks up to you and pays you 5 dollars. You think the gov't should tax that? Should they tax the money parents give their kids for Christmas or birthdays?

If a parent leaves money to his/her children upon death, that gets taxed. Technically it's a gift too (although a very big one), but we have no problem with the government taxing it.

 

[airplanemechanic]

If a parent leaves money to his/her children upon death, that gets taxed. Technically it's a gift too (although a very big one), but we have no problem with the government taxing it.

You're moving the goalposts. That's an inheritance tax. I'm talking about a GIFT. A tip between a patron and waiter/waitress is a gift and should be taxed at the same rate a gift between a parent and child is. ZERO.

 

[MayorQuimby]

You're moving the goalposts. That's an inheritance tax. I'm talking about a GIFT. A tip between a patron and waiter/waitress is a gift and should be taxed at the same rate a gift between a parent and child is. ZERO.

Then it comes down to whether tips are a gift or is it wage. Some people think it's part of their wage. If this is true then it needs to be taxed like all wages.

 

[BlackSand]

Then it comes down to whether tips are a gift or is it wage. Some people think it's part of their wage. If this is true then it needs to be taxed like all wages.

.

Yeah ... It doesn't matter what people want to think.
Tips are considered part of a server's wage ... That's why their pay per hour can be less than minimum wage.

.​