I have a pet theory that restaurants are implicitly subsidised by everyone. Here's the prospective chain: * Restaurant pays servers minimum wage * Servers mak

I have a pet theory that restaurants are implicitly subsidised by everyone. Here's the prospective chain: * Restaurant pays servers minimum wage * Servers make more than that via tips * Servers do not report tips (maybe past some threshold, let's say min wage) on taxes since they receive them in cash * Restaurant pays payroll taxes on minimum wage, servers pay income tax on minimum wage * The remainder that the server keeps and the lowered payroll tax comprise the subsidy. If the restaurant had to keep server pay constant, it has to compensate for the tips and the income tax on the tips, and it has to pay increased payroll tax on the rest. Not doing this is highly advantageous to every party here except the taxpayer. And the taxpayer doesn't care about the few microcents on the dollar. I still tip because that's just how things work here, of course.