4 ms·

No tipping policies in the US will never work as long as tips are untaxed. Otherwise, it is a lose-lose. Diners pay more than with tipping, servers' take-home p

No tipping policies in the US will never work as long as tips are untaxed. Otherwise, it is a lose-lose. Diners pay more than with tipping, servers' take-home pay is reduced. That is why most restaurants that have tried no-tipping have gone back to it.

mikeash 8y ago
Only cash tips are untaxed, and only if the worker evades taxes by not reporting them. Given how common card tipping is (and the article is entirely about this) I don't imagine it makes a particularly big difference.
mh8h 8y ago
The person who receives the tip needs to declare that as income.
TylerE 8y ago
Tips are not untaxed. Many servers just don't bother to report cash tips (aka: tax fraud).
awalton 8y ago
...tips are taxable income: https://www.irs.gov/newsroom/are-tips-taxable-irs-offers-tips-on-tips https://www.irs.gov/newsroom/are-tips-taxable-irs-offers-tip... . They're just hugely underreported because the kinds of people that work off tips are people making $2.15/hr instead of actual minimum wage (which is still criminally low). That's what needs to change in this equation - paying workers what they are due.
moate 8y ago
Spoilers: Tips are taxed. It's just that loose cash without a paper trail is extremely hard to track for the IRS and most waiters aren't committing enough fraud to warrant the manpower. Tipping won't go away until restaurant owners stop being dorks about the whole matter. They also benefit because the unaccounted for tips don't count as income to them, and thus they benefit as well. The bottom line is, patrons get sticker shock when they see the real price of a meal. This happens when restaurants change prices after a few years because the cost of product goes up, or if they switch to paying a living wage to their employees. If the culture as a whole doesn't switch, then people are just going to keep supporting poor labor practices by the industry because they typically have their own issues to focus on. >>That is why most restaurants that have tried no-tipping have gone back to it. Citation absolutely needed. Many restaurants have never tried it, and many of the restaurants that have tried it kept it.
nedwin 8y ago
Tips are taxable. You could probably get away with shortchanging the IRS where tips were all cash but with cash declining on a value + volume perspective I think those days will be behind us soon enough.
bootlooped 8y ago
I think a big factor in restaurants trying, and failing to implement no-tipping is that society expects to do it. A good portion of people just won't accept not doing it.

mikeash 8y ago

Only cash tips are untaxed, and only if the worker evades taxes by not reporting them. Given how common card tipping is (and the article is entirely about this) I don't imagine it makes a particularly big difference.

mh8h 8y ago

The person who receives the tip needs to declare that as income.

TylerE 8y ago

Tips are not untaxed. Many servers just don't bother to report cash tips (aka: tax fraud).

awalton 8y ago

...tips are taxable income: https://www.irs.gov/newsroom/are-tips-taxable-irs-offers-tips-on-tips https://www.irs.gov/newsroom/are-tips-taxable-irs-offers-tip... . They're just hugely underreported because the kinds of people that work off tips are people making $2.15/hr instead of actual minimum wage (which is still criminally low). That's what needs to change in this equation - paying workers what they are due.

moate 8y ago

Spoilers: Tips are taxed. It's just that loose cash without a paper trail is extremely hard to track for the IRS and most waiters aren't committing enough fraud to warrant the manpower. Tipping won't go away until restaurant owners stop being dorks about the whole matter. They also benefit because the unaccounted for tips don't count as income to them, and thus they benefit as well. The bottom line is, patrons get sticker shock when they see the real price of a meal. This happens when restaurants change prices after a few years because the cost of product goes up, or if they switch to paying a living wage to their employees. If the culture as a whole doesn't switch, then people are just going to keep supporting poor labor practices by the industry because they typically have their own issues to focus on. >>That is why most restaurants that have tried no-tipping have gone back to it. Citation absolutely needed. Many restaurants have never tried it, and many of the restaurants that have tried it kept it.

nedwin 8y ago

Tips are taxable. You could probably get away with shortchanging the IRS where tips were all cash but with cash declining on a value + volume perspective I think those days will be behind us soon enough.

bootlooped 8y ago

I think a big factor in restaurants trying, and failing to implement no-tipping is that society expects to do it. A good portion of people just won't accept not doing it.