Income tax + payroll taxes + state income tax can easily total 40 percent, so a 12 point bump in tips is not a big disincentive to tax avoidance.
And in NYC they have to pay city income tax on top of all that.
(If the cabbie incorporates and maintains a business bank account and payrolls himself and files taxes correctly, he'll only be paying 15-25% on some fares. I'd be surprised if any significant number of cabbies bothered with this.)
And in NYC they have to pay city income tax on top of all that.
(If the cabbie incorporates and maintains a business bank account and payrolls himself and files taxes correctly, he'll only be paying 15-25% on some fares. I'd be surprised if any significant number of cabbies bothered with this.)