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I think the economic analysis of tipping is pretty complex. Cash tips allow for a lot of tax avoidance, which makes a huge difference with payroll taxes. Also t
by conanbatt 6y ago
I think the economic analysis of tipping is pretty complex. Cash tips allow for a lot of tax avoidance, which makes a huge difference with payroll taxes. Also the price differentiation effect is very good for businesses, they increase revenues (not only the "split" between tips & wages)
- lotsofpulp 6y agoIt’s not complex, just price obfuscation, price discrimination, and tax evasion. All advantages for the seller and disadvantages for the buyer.
- conanbatt 6y agoThe state not collecting in the transaction is a benefit for both parties, because you can buy/sell at a lower price. Price discrimination means you can sell at a lower price to customers who might will not buy otherwise. There is no price obfuscation.