Taxes are paid on tipped income by the employer and employee. It's not a subsidy as much as it's independent contracting plus a (nominal) supplemental base wage

Taxes are paid on tipped income by the employer and employee. It's not a subsidy as much as it's independent contracting plus a (nominal) supplemental base wage. There's more to the dynamic, but that's the gist. I have a feeling we're saying the same thing, so here's the word from the source: https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting#:~:text=An%20employer%20who%20operates%20a,employees%20reported%20to%20the%20employer https://www.irs.gov/businesses/small-businesses-self-employe....