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.
I would say this is ridiculous, until I read Snyder v. United States[1,2].
> Held: Section 666 proscribes bribes to state and local officials but does
not make it a crime for those officials to accept gratuities for their past
acts. Pp. 7–16.
The real kicker in that case is that Snyder claimed the money was payment for services as a consultant to Peterbilt--which would be an obvious and glaring conflict of interest with his duties as mayor. But as far as I can tell this wasn't even considered anywhere--not the Federal prosecutors and not the judges at any level.
I think a difference between a bribe and gratitude is pretty obvious. If the official had prior knowledge that he would receive an award, its a bribe. If he had no reason to expect it before making a decision, it's gratitude.
Naw it's fine... Just pay them $2/hr. They can make up the difference with tips. Also, they should have to share with the other congressmen/women evenly.
Supreme Court has decided that the final arbiter on rule making between statutory lines is on the courts now though. IRS can promulgate a regulation like that but anyone can take it to court and get their case ruled on separately.
Courts have always had oversight to some degree. Even when new statutes are written, you don't know if they can be enforced effectively until someone challenges the statute to create precedental case law validating it doesn't violate rights or anything.
> Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card or any other electronic payment method.
> The value of any noncash tips, such as tickets or other items of value.
> Tip amounts received from other employees paid out through tip pools, tip splitting, or other formal/informal tip sharing arrangement.
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.
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.
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.
> 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.
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.
They were not always so bad. I tried one out when they were just installed (and everyone avoided them); they ran a lot faster, with no upselling or ads. The adware garbage that has long infected the internet has gone right into their kiosks.
Just like how McDs just raised prices endlessly for the past few years, they've also intentionally turned ordering into an adversarial experience.
The biggest issue I have with it is that the touch screen is unresponsive. You press something, and it responds a second later. Completely unforgivable.
On the contrary, I believe they are intentionally laggy to rate-limit the orders, so that people in line can get pissed at the person in front of them rather than the waiter/server taking time to prepare and package the order. Also avoids overwhelming the counter.
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 tip at my local coffee (1-2/wk) because they are always nice, cool when I forget my wallet, get my "usual" w/o prompting, stickers for my kid, give me pro-tips on pastry baking, etc
But if I went daily it'd be like $8/coffee.
Espresso machine at home was the right answer. Pays for itself after only 200 coffees.
I tip at places like coffee shops and delis because the person taking my order is often also preparing it. If they’re just handing me a bag from the kitchen I don’t tip. Maybe this is silly.
I will be honest, this is where I have some conflicted opinions.
In many coffee shops they are different people. There is just the person at the register and then there is the person who made my coffee. Who did the tip go too? I would assume it's pooled, but I have no way to know that.
This isn't the case everywhere, there are for sure places that it is the same people (or one place I go to it is a joint effort, it is a super small place with them regularly both shuffling work like one pouring milk while one brew the espresso).
It is because they are literally just doing what they are paid for. I would love if ever time i hit my sprint goals i got tipped by my employer or better yet what is actually happening is they should tip me at the start of the sprint in order to be in my good favor so i don’t bomb the sprint.
This is the world we live in. Where everyone now feels like they have to give someone extra money just because they showed up to work. Better yet is shitty waiters who have a built in 20% tip. The entire thing pisses me off.
I use to enjoy going to restaurants and would tip easily over 20% because i would get awesome service. Now you are paying that in hopes they don’t spit in your food next time you show up.
I stopped going out to eat because the entire industry is full of assholes now who think they deserve your money. I still follow a lot of people who work in the industry on social media from 5 years ago when i would frequent a lot of nice restaurants. The kind of shit they post is just completely toxic “why are you even coming out to eat if you don’t tip over 20% type crap”.
It's exactly the same service at the deli counter at my grocery store. They make sandwiches to order. Yet there's no tipping at all there. No jar, no tip line on the receipt.
Same going to a coffee shop is now a luxury reserved only for vacations, or if I want to meet someone outside home.
Starbucks has become my goto, because of their app, ubiquity, and consistency. Coffee culture, similar to wine culture is blown out of proportion. I drink an Americano and Starbucks is just fine.
> 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.
I think shuttered businesses are fine. If they can't provide services that are worth the wage of employees they're just dragging the economy like a parasite. I think we're too quick to blame regulations for business failures. This kind of move for businesses feels like trying to cut losses not identify new revenue streams. This should have seemed inevitable when Starbucks opened on every streetcorner that they would eventually have to cut wages and resort to app ordering. The problem with this is it's lowering consumer expectations and new businesses have the infrastructure and financial need to follow their lead, leaving vulnerable service workers in the dust.
You have a kernel of an idea that I agree with but 80% of your post is irrelevant culture war nonsense that can't be taken seriously and doesn't fit with your main point. If you picked some random Seattle person on the street I'm sure they'd agree with you that management underhires and keeps people overworked.
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.
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.
I have; I worked in an ice cream stand at a dairy farm. And you're correct, because of the tips we made much more than we would have even if we had had a higher wage.
But to the point of the person you replied to, on the busy days, there would be two of us working. We were free to split labor however we liked. We made far more tips when it was my attractive, female, coworker taking orders and interacting with the customers, and me scooping, than the other way around. People absolutely do tip differently based on their biases regarding the worker they are interacting with.
Yes, there will be some people who are tipped an unusually high amount who will lose out.
But almost any significant policy or social change will have an impact like that. You have to basically give up on fixing anything if you're not willing to impact anyone.
I've never worked full-time since I was 16 but never a job where tipping was the norm (I'm in the US) so maybe I'm missing something obvious but isn't a stable income preferable? And where is the assumption coming from that doing away with tips invariably requires making less money?
That seems like a highly presumptive gamble. And, as referenced elsewhere, it isn't the right argument against pushing for progress in pay equity.
I'll admit up front that I'm simply not going to see eye-to-eye with anyone who thinks a system is acceptable or sustainable that requires subjugation of many for income maximization for a very few. There's FAR too much capital in play for me to feel bad at slightly less comfort for some if it means drastic reduction in suffering for so many.
No, they don't. You're trying a false equivalency between a bribe and gratuity. A bribe happens before the service is provided and the service is contingent upon the bribe. Gratuity is post factum, technically based on the quality of the service provided.
Let's take police officers in México, for México, for example. One needs to pay bribes to get anything done. On the other hand, they have almost zero job protection, have absolutely crappy salaries, most of the time have to buy their own uniforms, their own gas for the police cars, and so forth. And on top of that, they have to contribute to "upwards bribes", so they can keep their jobs.
It might not be identical to the situation of a water at a café, but jeez, does it rhyme with it.
Tipping should be banned. Waitstaff at a restaurant should be considered like any other employee. Tipping someone because they went "above and beyond" should be considered as an insult, because it's literally a bribe, "I'll give you something extra for your trouble".
Alas, it's a bit too idealistic of me to expect that to happen.
Yet? It’s always awkward at the end of the school year when we are asked to prepare gifts for the teachers. Like, how do you do that without it appearing as a bribe/entitlement?
Most of the time it's to get them to actually do their job; shitty pay, bad or nonexistent oversight, corruption (or just "bribes") in higher levels too, conditionally applied rules, etc...
That creates a de-facto auction for their time and service, you (and what you're adding on top) vs. everyone else (and what they are adding on top). There's an unofficial "price list" depending on how quick and thorough you want things to be done.
"Tipping culture" easily slides into "bribing culture" when it becomes an expectation, regardless of what the Supreme Court says about it.
Tip 0 and see what kind of service you get the next time.
I used to work food delivery and naturally the customers ordering takeout at fancy restaurants would always tip 0 to the restaurant even if they tipped me for delivery.
I quickly found myself ignored by all the workers at those restaurants, orders take an hour extra to fill, no one talk to me, etc. eventually I learned to tip out of my own tip because my next service is contingent on the prior tip.
I live in an affluent area and my daughter works in food service. She says the people she knows to be wealthy are generally the worst tippers (often 0%). I have stuck with 15% even though that is below the suggestions on receipts these days and she tells me that's high for the restaurant's average.
Let's be real. You are creating a conflict of interest. If I take "tips" from my customers, my employer would be pissed. The only reason we are considering this to not be corruption is because it's a system foisted on them by management to reduce their costs.
In more egregious instances in food service I saw employees trade goods for tips quid-pro-quo and cut the business entirely out of the transaction.
I work for the government and we are not allowed to accept tips. Even if there is a technical difference between a bribe and a gratuity, it is too easy to misconstrue a tip as a bribe (by either or both parties) and it is too easy to frame a bribe as a tip.
There are plenty of situations where you pay up front and fill in the tip before service is actually rendered. I've had situations where I tip the standard and get bad service (eg missed side orders).
It's irrelevant if you pay people before or after. You can't tip the police after they perform some sort of service. You're still trying to influence them with money.
It should be based on quality of service, or at least on some service being provided, but what has now become the norm is the expectation that you pay a tip (and a hefty percentage one, not just a dollar in the tip jar) just for buying a food item at the counter, with zero service provided.
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.
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.
If it means I don’t have to carry around a wad of bills in a gold money clip and hand them out like I’m John Gotti, then yes, Visa did give me exceptional service.
So should I not be tipping for normal service? Its pretty confusing because in my country tipping seems to be the expected default, not something reserved to exceptional circumstances.
All things equal, I do think tipping for normal service from people who are employees is messed up.
Unfortunately, culture in many countries is to tip in certain situations, especially in restaurants, even for normal service. But just because it's culturally normal to tip in restaurants in your country doesn't mean you'd tip a giant corporation like Visa. That's not how culture works.
Not that I disagree with this point but I'd say the best reason to choose cash would be that you can control who receives it. Give it directly to the person who provided the service you're tipping for, whenever possible.
Exactly! Otherwise you're giving control over the money to someone else, who will use that control to further screw over the already marginalized service worker.
You're absolutely right, cash is indeed inconvenient. But all digital payments make you pay a middleman "platform" which tries to extract as much of the transaction as possible while providing the minimum possible value. Oh and by the way this platform's also trying to become a monopoly so it can eventually provide less than the minimum value without losing you as a customer.
Crypto claims to be a solution to this, but in practice approximately all crypto transactions go through a middleman (exchange) which takes a cut. It's unreasonable to expect your barista to go through the effort of accepting crypto payments without involving an exchange.
Cash doesn't have this problem.
I'd love to be proven wrong about this. Is there a digital payment method that runs on phones that doesn't subsidize a middleman?
Chinese payment platforms are the closest to a light middle man, but this might just be VC subsidizing things. Cash has its own expense of course, you need a middleman regardless, even if it’s just your local bank branch taking daily merchant cash deposits.
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.
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.
You’re tipping the restuarant so your date looking over your shoulder doesnt get the ick, its a lot of energy to get what you want out of a relationship for it to be felled by a tipping protest
This culture is socially policed and has nothing to do with service, or whether tips are split, taxed, or whether that part of the country already abolished sub minimum wage
Usually the person at the register is not the one preparing the order in these situations, or if they are, then they're in your view the whole time. I don't think that's much of a concern.
> "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?"
And what am I getting when I'm sitting down? The restaurant should be paying this person to bring me my order just as much as they pay the cashier that rings up the order "standing up".
The whole thing is ridiculous and we're just pandering to a very vocal and particularly nasty minority's opinion (just look at "tipping" subreddits and Facebook pages to see the toxicity, entitled-ness and hostility towards customers).
And because it's unpalatable to say these things, we've all collectively come up with post-rationalizations as to why we should tip and how it'll go horribly if we try address it. "Oh but if you don't tip the employer won't pay them" and endless variations of that and "a ha, but you didn't consider this" gotchas that effectively make this an un-discussible topic.
People worked hard to get some sort of "minimum wage" and then we all collectively allowed tipping (Edit: service worker's that get tips) to be exempt with some sort of "make up for low tips so they get minimum wage anyways" complicated setup that added yet more ways for employers to shaft these "suffering" workers.
I agree, but tipping at sit-down restaurants is far more culturally ingrained. Tipping at counter-ordering restaurants is newer, and a gray area, there's still time to nip it in the bud before it becomes the same cultural expectation.
The price for food i see includes all costs, ingredients, service and preparation. Only in North america does this weird pressure exist to pay service workers extra, untaxed money.
I will tip counter if they have a jar or the terminal asks, but if I do I treat them as tipped workers -- i.e. I will leave all my trash sitting at the table and wave them over when my food is ready.
Generally my rule is 10% tip for bussing and 10% for taking and bringing my order.
It’s hilarious when they ask for tips but yet I’m expected to get my order when they call out my name as well as expected to clean/bus my own table and serve myself water from a communal water vessel.
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?
This is one of those cultural differences that are so hard for me to even comprehend.
The idea of living in a place where the price I see written is not the one I’m going to pay for is so bizarre.
Like it doesn’t make any rational sense given the context I grew up in.
Still, reading this entire discussion is a reminder that societies can be incredibly different even in the most mundane of things like going to get a coffee.
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?
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.
It is ridiculous. If they want to increase the price by 15% then just do that, but don't pretend you're not by just asking for a 15% tip instead (for the pleasure of using the self-checkout terminal).
True, but the problem really seemed to start when the swivel-to-face-customer POS terminals from Square/etc started to be used - the ones that display these 15/20/25% tip prompts.
I'm trying to think if I've ever seen one of these terminals that doesn't prompt for a tip?!
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.
Much as I hate corporate greed, I actually disagree with this one.
By and large, huge corporations tend to know that tip prompts annoy people and don't have them.
An overwhelming majority of the egregious tip asks, either for generic not-normally-tipped services, or prompting "25%, 35%, or 45%?", have been small businesses or food carts, especially in tourist-heavy areas.
Corporate greed isn't really part of it, because higher tips for the workers does not make its way to shareholders.
I didn't say huge corporations. Small companies are not somehow immune.
Higher tips for workers absolutely makes its way to shareholders or owners, just not directly. They don't need to pay workers as much, and they will see lower staff turnover.
You are absolutely correct. However, when people talk about "corporate greed", they usually are talking about large corporations with shareholders, not a food cart with three employees.
I find the second point questionable. Firstly, the two options you give are mutually exclusive; either they don't have to pay staff as much, or they will see lower turnover. Lower wages made up for by tips will not decrease turnover if the owner passes that on to themselves via lower wage.
Secondly, and this is a regional thing, but where I live (Oregon) there is no exemption from minimum wage for tipped workers. Workers who make tips must still be paid at least the base minimum wage as everyone else. This puts a hard floor on how low wages can go regardless of tips.
I'll acknowledge that there can be some benefit to owners and shareholders from tips, but I do not think that the tip gouging that has become common benefits a shareholder more than it hurts them via consumer frustration.
> why would you tip a barber? because they cut your hair good? what was the base payment for then?
Let me return the question: why would you tip a waiter? because they brought your food to your table? isn't that why they should be paid by the restaurant?
Let me also state that, residing in a European city, I do tip my (cheap) barber every time I go because I feel they do an outstanding job at 20% less the price than most competitors, and that work deserves praise in the form of a tip.
In general, it seems to me that a tip should reflect something outstanding. In addition to my cheap barber, I also usually tip at fancy restaurants where the service has proved very, very high above comparables.
"Let me also state that, residing in a European city, I do tip my (cheap) barber every time I go because I feel they do an outstanding job at 20% less the price than most competitors, and that work deserves praise in the form of a tip."
Do you also tip your local bike shop or computer store when they sell you a computer or bike that is outstanding and costs 20% less than most competitors? Do you tip your car salesman? Do you tip your bus driver when he/she is 20% faster?
I might tip a bike or computer shop for doing a superb job at repairs. Hell, if I were to hire a person to build a computer for me I might tip them if they did an exceptional job. Tips are for services (like a barber provides), not products (like computers, bikes, or cars).
Tipping in the example circumstances I gave isn't typical, but it's something I would consider doing in exceptional circumstances.
I guess some of it is cultural rather than rational, but is tipping wait staff so much different? If you go to an expensive restaurant and pay double for the same food as in a cheaper one, then what exactly are you paying for, and in any case why is the tip a percentage (vs fixed amount, as is normal in the UK) such that the wait staff in the more expensive place get more?
Whether rational or not, I'm personally fine tipping where the worker is making a low wage, and have spent time personally attending to me. Part of it is thinking that they'll appreciate it more than I will miss it.
2nd order corporate greed via jacking up the prices on everything and pocketing the profits, leaves everyone lacking, asking for tips imo is just trying to make up the difference without having to follow the Lordship's move.
Yup he cuts my hair good. Always tip your barber. Don't want a shitty haircut next time. Dunno what his base pay is. He does have to rent his chair from the shop. How much does that cost?
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.
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.
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?
For instance it's per workplace and there's a threshold of how much support among the workers you need, etc. It's not just something you join and then you're in a union.
> 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?
If you were to organize a union, how would you increase membership while ensuring that management doesn't know that you're organizing a union? You mention online forums and similar but how do you let people know about the forum for the sake of organizing while keeping management out of the loop for the sake of secrecy?
They can know about it, because posting online is effectively anonymous (for that purpose). That's what I meant about "coming out", they could organize anonymously and all agree "if you go, I'll go" and one day they shed the anonymity in unison.
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?
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.
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.
The easiest seems like who is paying the "tip". If it's your employer, it's taxable compensation. If it's a customer, than it could be a tip.
Then there would probably be a bunch of sub-bullet points defining whether a tip is taxable depending on whether you have a direct relationship with the customer tipping you, whether the "tip" is mandatory, or at the discretion of the customer, are you in X roles (e.g. barista) within Y industries (e.g. food services).
If you put a cap on income, then both you and the IRS need to maintain a record of the tips you received, to prove that you’re on the right side of the cap.
I don’t think that saves much in administration costs.
Yeah, maybe unintuitive, but even if it costs more to collect and enforce taxes than you get from taxes, it also has a preventative side to not abuse it.
I don't think so either, but they likely have useful data that politicians can draw off of. Remember Milton Friedman, who wanted to eliminate many forms of taxes, came up with a lot of his policies after working at the Treasury department on taxation mechanisms.
TLDR: Tax on tips is hard to enforce. A lot of it goes unreported. In 2023, the IRS wanted to revamp voluntary enforcement programs, consolidating three voluntary programs into one voluntary program. But they don't plan to move forward with that.
Trump ran an ad saying Kamala wants to "harass" tipped workers and has "weaponized the IRS", and making himself look like the good guy by promising to simply eliminate the tax. Kamala responded with a competing plan but with some modifications. One modification is to make tips exempt from income tax but still subject to payroll tax, allowing workers to get social security benefits when they retire.
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
Sounds like all the blue collar workers who get tips are now screwed by this system. Getting tipped against a maximum wage defeats the purpose of tipping them.
Say you tip your mailman $100 at Christmas or refrigerator deliverer type stuff.
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.
Businesses already pay the exact minimum wage of $2.13/hour. The employees either make an additional $5.12/hour in tips or the employer must make up the difference at every pay period. Employees routinely underreport their tip earnings beyond the $5.12/hour to not pay taxes and fly under the DoL radar.
Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4. Then if the employee is underpaid the employer must. Make up the difference. Employees who routinely don’t make full tips are less likely to continue working at the restaurant but you can’t just legally fire them for not making enough tips.
I am sure lots of people have also noticed fast food restaurants pushing for tips for the crew at checkout. This is an industry shift. Same with single owner businesses asking for tips (generally if someone sets their own price a tip shouldn’t be expected, but Square et al made that a normal part of checkout and people now believe it’s necessary). With expected tips getting into the 25-30% territory I wonder if there is an opportunity here for a restaurant chain to advertise itself as “we pay our employees well so you don’t have to”.
> I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same.
Rule of thumb, there's _nothing_ in US law where you can say "things vary by state, but they're all the same in way X".
In this case, California has no concept of tip credits. All employees, regardless of whether they receive tips, must be paid at least minimum wage (Currently 16 $/hr)
There are several laws like that, for example for child support. But there isn’t one for minimum wage. You cannot however violate Federal minimum wage laws as enforced by DoL at the state or local level. So in effect that law spells out a pattern.
Having reviewed these laws in all applicable jurisdictions they do follow the same pattern: California’s tip credit is $0 as of right now. Oh and there is the Panera exception to its minimum wage law which is fairly novel.
> Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4
This is not true in California, at least. Restaurant workers are paid at least minimum wage (which is $16 or higher depending on locality) and then tips on top. "Tip credit" is not allowed
I served for years, almost no one was claiming the exact amount of your cash tips. Credit card tips would automatically be tallied but cash tips are effectively under the table.
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
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.
Yet places with higher minimum wages don't always have higher burger prices at McDonald's.
And places with enforcement of minumum wages and no tips don't always have higher prices for food.
A very real alternative to your proposal is that market pressure could force prices down and eat into owner's profit. Market forces seem to be what controls the prices most places you can get food with and without tips.
I think (hope) the expectation is to eventually increase wages and prices and phase out tips altogether. Tip culture has gone insane...even my home inspector's last invoice has a tip line!
Absolutely. The article in question is about how it runs counter to increasing said wages instead, and the comment I'm replying to I think is saying if we raise wages tips will raise. Which is true, short term.
I mean, wages have been increasing. Legislated wages are a vanishingly small portion of earned wages, except in the states with the highest minimum wages relative to market rates (and then usually only in the least-developed areas in those states, which is also where those legislated wages are likely to cause unemployment).
Minimum wage is already $20/hr where I live. Tips can approximately double that. There is no version of the world where employees will willing give up those tips and no restaurant can afford a $40/hr minimum wage.
This is just a one-way ratchet on employment costs, not a plausible way to eliminate tipping.
Of course they can: increase prices accordingly (I'm not commenting on what a reasonable wage for serving is, just that tipping is a bad way to get to that wage).
It's not like customers don't have to consider the cost of the mandatory tipping bullshit when you consider where to eat and whether you can afford it in any case.
There are several states that already don't have a separate tipped minimum wage, including California, and they all have restaurants that operate just fine. The rest of the world does not have tipped minimum wages, and very little tipping culture compared to the US and they also manage to have restaurants that people can afford.
There should be some sort of cap on tips. My friends and I went our for dinner last weekend and we ended up spending around $600 for dinner, there were 5 of us. They automatically added 20% , $120 as a tip. We spent about 2 hours at that restaurant. I wouldn't say service was spectacular. The server infact made us over order, everyone had to take boxes back, they messed up 2 of our courses, but we had no recourse.
> these laws are marketed as reducing the need for tips.
One of the presidential candidates gave a speech recently with a back drop that said “no taxes on tips” or something.
That did nothing for me in terms of thinking meals would be cheaper. I assume they’re marketing the idea to restaurant workers directly rather than patrons.
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.
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.
I am honestly curious who was really pushing this? Unless I missed it I don't think I heard anything about no taxes on tips until both candidates suddenly supported it. So just seems like it came out of nowhere.
If we really are going to stick with tips, I think it's fine. Maybe it will fix some of the issues on the workers side temporarily.
But we honestly just need to move away from tipping in the US. Give everyone a livable wage and increase prices slightly. I am already paying 15/20% more thanks to tipping so there is no harm in just increasing the cost of the item, likely less than I am paying now since it would be evenly split between everyone instead of just those that tip.
> Trump has been campaigning on the "no tax on tips" policy since June, after a Las Vegas server told him the government was taking too big of a cut from her tipped wages.
Then Harris was forced to match. That’s pretty much it. There’s no economic analysis behind it.
Isn't that essentially already the case in the USA? The standard deduction for a single person is $14,600/year and the federal property level is very close to that at $15,060/year.
It's kind-of weird how these levels are set equal nationwide... as there are regions where this is a decent living and one could own a small single family home or condo, an older but reliable car, and eat well on that salary... and places where you would be homeless and have no day to day security or stability required to even keep a job.
Nonsense.... I lived on under 10k/year for close to a decade in rural Oregon- a while enough ago that that would be about $14k/year now adjusted for inflation.
I had a decent 2 bedroom apartment, two older but reliable cars I got for nearly free at auto auctions and a fast motorcycle, and cooked my own meals 3x/day from top quality local farmers market ingredients. I'm talking REALLY good food, the best quality fresh local meat and vegetables money can buy, that was the one thing I would not compromise on.
I traveled a lot for fun also, but it was in my own (very fuel efficient) vehicles, cooking for myself on a camp stove while traveling and I could only afford restaurants a few times a year.
Almost all of my possessions like furniture, etc. were high quality things I had slowly sourced for free over craigslist, with some dumpster diving and word of mouth. Mostly high end vintage hardwood stuff that looked expensive- Rich people don't sell that stuff, they give or throw it away.
Personally, I felt like I was living very comfortably, and I quite enjoyed the challenge of living frugally. I felt a bit smug about how I creatively found ways to have pretty nice things, and a nice lifestyle without much cost.
I'll add that nowadays I'm into 'sea foraging' and can jump in the ocean with a mask and a pole spear and eat like a king for free in a few minutes.
I think if you look you'll find that housing costs have rapidly outpaced inflation, even in rural Oregon. Studio flats in La Grande are approaching a thousand dollars a month. I believe what you're saying is true, but I don't think the experiment could be replicated today.
You're probably right- I had a nice place much bigger than I needed and walking distance from work in one of the more expensive and desirable rural Oregon small towns for under $400/month!
However, there are places more affordable than Oregon... I recently looked at home prices in the Mobile, AL area and it looks like you can buy a livable 3 bedroom home for ~$60k there- that could be about $400/mo for a mortgage.
If one has the skills and knowledge to do so, you can still live very cheap on a boat almost anywhere- I know a lot of people with incomes in this range living on well maintained ~30 foot sailboats, even in the SF Bay area.
A lot of what I'm talking about is substituting skills and free time for income. If you are good at DIY stuff, cooking, etc. you can live better for cheap. I only have those skills because I grew up upper middle class, and had parents that taught them to me- and I was in boy scouts, etc. You also have to have a lot of free time- if you're making $14k/year part time with no kids, it's totally different than if you're working full time and have kids- although the minimum deduction and poverty line will be higher with kids.
I have friends that grew up poor with absent parents, and their lives are much more expensive than mine in many ways- they can't maintain an older car so they have to buy a newer one, they can't cook so they eat out more, etc.
There is argument against and in favour. France works like that and it means a lot of people don’t pay taxes and in return don’t feel very connected to the state spending. It’s weird but I think a token amount of tax completely offset by state handovers is preferable to no tax purely from a mind set point of view (you too are part of the collective and contribute to the working of the state).
The whole thing is a bit disingenuous anyway when so much of tax revenue actually comes from VAT and other indirect taxes.
I always found it strange that modern socialists and leftists are very supportive of income taxes, even though it is a dreadful burden on those people who have to work for their survival. Why wouldn't leftists instead be more for taxes and tariffs on land, on commerce, on natural resources or on luxuries?
The funny thing is that one of the goals of the communist party in the Soviet Union was to abolish all income taxes! Khrushchev even lamented later that they couldn't reach that goal. I suspect many hackers would have loved to be members of the Supreme Soviet, but how would they have reacted when Khrushchev suggested to abolish all income taxes?
> I always found it strange that modern socialists and leftists are very supportive of income taxes, even though it is a dreadful burden on those people who have to work for their survival
What? We did "trickle-down" economics before. Surprisingly enough, it didn't work. At all.
Also, back in the 1950s/60s, we thoroughly soaked the rich and got to go to the moon[0]. Then the 1970s came around and the new gen of wealthies were all "yeah nah, that sucked, let's do something about it!"[1]
[0] in b4 "it's way more complicated than that!!1~"
When I say it's a dreadful burden, I mean it. For people doing physical labour and relying on their work for survival, they know exactly how much blood, sweat and tears they had to give for each dollar taken from them in taxes. For the people relying on real estate price appreciation for their income, taxes are more of an abstract.
That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude - and then of course you have to consider https://en.m.wikipedia.org/wiki/Laffer_curve
Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid working at McDonald's because their trust fund requires them to work for a decade before they get access to it?
When you account for all taxes this may be true but for just income taxes it isn’t. According to the link below the bottom 50% makeup just 2.34% of income taxes paid. So, eliminating income taxes and maybe adding a return free filing option for the bottom 50% of households looks super doable.
Yep and that is a separate issue that needs to be addressed. When you have people who are so wealthy that they can switch their nationality on a whim then that requires special solutions.
From the perspective of government receipts, the bulk of taxes are paid by the middle, not the tails. The rich don't have enough numbers, and the poor don't have enough money, to offset the area under the middle of the curve. This isn't true everywhere, but is true in the US and most developed countries.
Interested in digging deeper, do you have a source for this:
> That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude
The Laffer curve is just kind of made up. He just said "I believe this is how it should work" and then tried to make it work, even though it never quite does. And it often turns in results that its proponents don't like.
what would stop me from "hey I'll do this for $5/hr, but it would be nice if you tipped me $500 for it" — this "policy" is just election sound clip pandering
IMO there should be a CoL adjusted minimum livable wage across the country, and it should be illegal to pay a >18 year old less than what it takes to live on. And that should be calculated from the barest minimum living standards[1]. At a certain point it becomes unconscionable for a wealthy society not to provide pure commodities at their lowest cost of delivery to it's poorest. As we do that, tips should be eliminated too.
There's very few of us with a hard enough heart who'd say no to someone who asked for a glass of tap water, or to use the toilet. As a society advances other basic necessities should move into the common domain too. (And the wonderful thing about capitalism is it has driven down the real costs of most of these things to historically absurdly low prices eg a thrift store pants for $7 in the face of $15 minimum wage is cheap compared to history when it was normative to have only 2 sets of clothes)
[1]: I'm thinking like shared bedroom, thrift store clothes, rice + beans + costco, annual checkup + bare minimum health insurance, annual dental cleaning / bare minimum insurance, a mint mobile $15 a month cellphone plan, and a library card for entertainment and education. You're not thriving, and you're not a catastrophic burden on the system either.
Our society is wealthy partially because of this inequality, not in spite of it. The real risk and extreme danger of penury provides a pressure for people to work for the lowest wages possible, keeping the price of the produced goods low for those who can afford them.
Places with more mechanisms to prevent falling into deep poverty and policies to alleviate it have higher wages at the very bottom, and less wealth both in personal net and GDP per capita. But even then it only benefits local workers: they still depend on an immiserated worker underclass somewhere to make their cheap goods.
Capitalism created this problem, and it is a fundamental mechanism in how capitalism creates wealth. It's not within the powers of capitalism to solve it.
Absolutely not. Compensation should reflect value received. This idea effectively forces a business to subsidize their employees, because you damn sure can't pass all that to the customer (because then we are just back where we started, just with an extra 0 on every transaction). Small businesses and business with low profit margins will be forced out of business. And this would consolidate capital into the hands of the big businesses and billionaires who can afford to pay everyone tens of thousands of dollars more than they can bring into the company.
A McDonald's cashier is not worth $55,000 just because they are >18 years old. That position is not supposed to be a career. That position is supposed to be a first job for a dumb 16 year old who needs gas money and $500 for a PS5. When their needs outgrow their paycheck, they are supposed to move to a job that pays more. Can McDonalds afford to pay the extra? Sure. But Jimmy's Hotdog Stand down the street can't, so he goes out of business and the money he would have made goes to McDonald's instead and the rich get richer.
I agree with you about the latter half of the sentence. But no business should be punished simply for being small.
I'd go so far as to say we should create laws that err on the side of "slightly favor the little guy" because, as I think we all know, big businesses have armies of lawyers, PR firms, and PACs that bend reality to their whims, whereas little ones mostly do not (though in theory they could band together for the same goal it's unlikely to happen if only for administrative issues).
I don't like tipping culture, but it does allow for wealthy people to subsidize service and incentivizes good service.
People that are more price sensitive tip lower and every once in a while a waiter will experience an extremely generous tip. I'm not convinced that forbidding tips would increase net wages paid to servers.
In terms of who is paying, restaurants will simply raise prices to account for higher wages. Their margins aren't that big.
Finally I think tipping definitely incentivizes good service. Its partly cultural, but I've noticed much higher level of service in the US compared to Europe were tips are not expected as much
I think for most folks getting lots of tips they find that he tips feel more like they're going to be... whatever they're going to be. Meanwhile their day to day job is more about other things going on, or if the food came out cooked wrong ... not so much something they control like a light-switch enough to make changes.
I've noticed much higher level of service in the US compared to Europe were tips are not expected as much
Might be true, but I don't think that's necessarily a good thing. If someone is forced to be excessively friendly/caring because he/she fears that otherwise he/she might not get enough pay, this is a toxic work culture in my opinion. Also (even though I don't have data on this) it might also create unfair advantages to certain people, for example I think it might be possible that people who are more attractive (especially in restaurants) get payed more. But for the last thing I am just guessing here.
I think it should be less about forbidding tips, and more about disincentivizing them, currently, if you make less than tips, some people feel like they personally have to tip because otherwise they're taking away (expected) wages
Give waiters minimum wage, split the cost among all sales, and if a server actually goes above and beyond, then I don't think anyone would complain about tipping them extra
Last time I was a waiter (more than a decade ago now) at a mid-range restaurant, on dinner shifts we were all making $15/hr on a slow night and sometimes over $50/hr. There's no world in which we'd have been making more without tips, and we wouldn't welcome it.
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.