An unjust tax that should never have been levied!!

[Politesse]

I do not have much respect for the mental or moral capacity of people who think that just because they did something, everyone else should also have to do it. I've had to do plenty of things that I would not wish on others.

 

[Scott C.]

An unjust tax that should never have been levied!!

When you tip your waitress at a restraint you may think this money goes to her/him but no; Not so~~~

Government taxes this tip giving him/her even less

This “tax” should be abolished!!

What say you?

Yeah tips should be taxed to the same extend that anybody's income is taxed.

 

[columbus]

Yeah tips should be taxed to the same extend that anybody's income is taxed.

That's the attempt.
The problem is the difficulty in policing small amounts of money, often cash, in small establishments. Lots of servers consider tax evasion a perk of the job. You can also evade creditors, spouses, ex-spouses, really just about anybody.
This presents problems for everyone. Often what happens is servers are required to pay on a minimum of 15% of tickets. Which really bites if your kitchen or other staff aren't up to snuff and you don't even average 10%. You have to pay tax on income you never even got.
Tom

 

[Scott C.]

That's the attempt.
The problem is the difficulty in policing small amounts of money, often cash, in small establishments. Lots of servers consider tax evasion a perk of the job. You can also evade creditors, spouses, ex-spouses, really just about anybody.
This presents problems for everyone. Often what happens is servers are required to pay on a minimum of 15% of tickets. Which really bites if your kitchen or other staff aren't up to snuff and you don't even average 10%. You have to pay tax on income you never even got.
Tom

People definitely should not have to pay on tips not received. I find that people who are generally honest land on different points on the sliding scale of "what under the table income should I report to the IRS and what should I keep in the name of 'it's just a little extra'". Should a 16 year old that made a $1,000 mowing lawns be required to report it to the IRS? And if required, should he/she ignore the law? Is ignoring that law good common sense, or is it dishonest?

 

[columbus]

People definitely should not have to pay on tips not received.

How would you distinguish between tips not received and tips not reported? It used to be a serious scam really.
Tom

 

[Scott C.]

How would you distinguish between tips not received and tips not reported? It used to be a serious scam really.
Tom

Reporting tips is definitely on the honor system. I'm not familiar with how restaurants make sure that tips are reported correctly. My son worked as a waiter and a restaurant manager. I'll have to ask him.

 

[oldbadger]

You do realize that tips are income and there is a tax on income. So of course it should be taxed.

But surely, in countries where the super rich stuff their money into offshore tax havens and cheat and deceive to evade taxation which costs billions in lost revenues, to make a big fuss about lowly paid workers receiving gratuities is strange?

In a World where 1% of the people possess 90%+ of the wealth it really is time to re-balance the financial scales. ?

 

[oldbadger]

Some Restaurants in the UK have been caught witholding the auto-tip additions put on bills, not paying them out to the staff.

Even if I am paying for a meal by debit card, I prefer to tip a good waiter with coins-in-hand. But some establishments have even stopped that by introducing an employment condition that no staff are allowed to carry any cash in their pockets etc whilst on duty.

People should get paid properly in the first place.

 

[Kangaroo Feathers]

An unjust tax that should never have been levied!!

When you tip your waitress at a restraint you may think this money goes to her/him but no; Not so~~~

Government taxes this tip giving him/her even less

This “tax” should be abolished!!

What say you?

Pay people an adequate living wage so tips aren't necessary

 

[Koldo]

Tipping feels like charity to me. And it seems rather weird to tax charity.

 

[Subduction Zone]

A local restaurant has eliminated tipping, though not entirely. They make it clear that the wait staff get a commission, which was equal to their tips. A better waiter will sell more food in the way of appetizers, deserts, beverages, etc. The restaurant makes more money, and the waiter makes more money. If someone really wants to they can still tip but the restaurant makes it clear that it is not needed. This is a higher end restaurant. So waiters are already well paid. I wonder if it would work for all restaurants.

I waited in my youth many many years ago so I understand the waiter's plight. In my day we were paid less than minimum wage because we made in up in our tips. I did. I think all servers at my restaurant did. But that does not mean that all restaurants had this happen.

 

[Shadow Wolf]

I worked as a server and eat out a lot, I've rarely seen anyone tip under 15%, usually 20+, where do you live?

Rural Indiana. When I was a tipped worker (pizza) I couldn't rely on them. Because I was delivering them, that didn't bode well for my gas tank. Even in restaurants, I've overheard people say they were tipping nothing.

 

[Subduction Zone]

Rural Indiana. When I was a tipped worker (pizza) I couldn't rely on them. Because I was delivering them, that didn't bode well for my gas tank. Even in restaurants, I've overheard people say they were tipping nothing.

I think that tipping may be more of an east coast phenomena. When I owned a furniture store and would sometimes do my own deliveries it took a while to get one loyal customer from the eastern part of the country that I did not need a tip.

 

[9-10ths_Penguin]

An unjust tax that should never have been levied!!

When you tip your waitress at a restraint you may think this money goes to her/him but no; Not so~~~

Government taxes this tip giving him/her even less

This “tax” should be abolished!!

What say you?

Tips are income. They should be taxed like income.

For most tipped workers, this should mean that they get taxed at a low rate.

 

[pearl]

What say you?

It's completely unfair. Those tips really make up for the extremely low salary. Added to that the government assumes the going percentage whether or not it is what one actually received. Our daughter waitressed through college.

 

[Subduction Zone]

Tips are income. They should be taxed like income.

For most tipped workers, this should mean that they get taxed at a low rate.

Not just at a low rate. For many of them there would be no income tax at all.

If a waiter is pulling down $50,000 a year when tips are included, there is no reason that they should not be taxed at the rate that anyone else making that amount is taxed. It may be "unfair" in the sense that they may have to set aside that money themselves. I don't know what mechanism is used to tax high earning waiters. Like I said, I used to own my own business. I had to make regular payments to the IRS on estimated tax. There was nothing unfair about that. Did I like it? Not really, but I knew that part of making money was paying the tax on the money that I made.

 

[Subduction Zone]

It's completely unfair. Those tips really make up for the extremely low salary. Added to that the government assumes the going percentage whether or not it is what one actually received. Our daughter waitressed through college.

People that earn a low salary are not going to be paying income tax on tips. Have you ever filed income tax?

 

[9-10ths_Penguin]

That's the attempt.
The problem is the difficulty in policing small amounts of money, often cash, in small establishments.

This is becoming easier as more and more transactions become electronic.

Lots of servers consider tax evasion a perk of the job. You can also evade creditors, spouses, ex-spouses, really just about anybody.
This presents problems for everyone.

Other industries and job types have this problem, too. For instance, lots of small business owners have what's effectively their or their families' personal vehicles registered in the company name. I've encountered club-level racers who slap their company name on the side of their race car and deduct the cost of their auto racing hobby as an "advertising" expense.

Often what happens is servers are required to pay on a minimum of 15% of tickets. Which really bites if your kitchen or other staff aren't up to snuff and you don't even average 10%. You have to pay tax on income you never even got.
Tom

Yeah... that's baloney. It pays for servers to track their tips somehow in case of the days they get audited so that the CRA (or IRS in your country) doesn't have to estimate their income.

 

[Subduction Zone]

This is becoming easier as more and more transactions become electronic.


Other industries and job types have this problem, too. For instance, lots of small business owners have what's effectively their or their families' personal vehicles registered in the company name. I've encountered club-level racers who slap their company name on the side of their race car and deduct the cost of their auto racing hobby as an "advertising" expense.


Yeah... that's baloney. It pays for servers to track their tips somehow in case of the days they get audited so that the CRA (or IRS in your country) doesn't have to estimate their income.

This law was first introduced way way back when I was a server. And yes, we did under-report our earnings back then. At that time a higher percentage paid income tax too. I don't think that I would have been paying any taxes on a inflation adjusted income today, or at the very least the taxes would not have been terribly high. At any rate back then we were required to report at least a 9% rate of tipping. I don't know the rate today, but I highly doubt that it is the 15% rate mentioned.

ETA: The 15% rate claimed is BS. A business only needs to make sure that their waiters report 8% of gross sales as tips:

Reporting Tip Income Restaurant Tax Tips | Internal Revenue Service

Please note, this does NOT include to go sales or other sales that are not done by wait staff.

 

[pearl]

People that earn a low salary are not going to be paying income tax on tips. Have you ever filed income tax?

Have you ever worked as a waiter or waitress? The income is raised by adding tips to the income.