5 ms·

Some interesting points: ~40% of tipped workers don't make enough to get taxed anyway, no tax on tips would actually advantage better paid workers like casino d

Some interesting points: ~40% of tipped workers don't make enough to get taxed anyway, no tax on tips would actually advantage better paid workers like casino dealers who don't need the help. NToT is described as a campaign to distract from minimum wage increase initiatives.

toomuchtodo 1y ago
https://jacobin.com/2025/07/restaurant-industry-tipped-subminimum-wages/ https://jacobin.com/2025/07/restaurant-industry-tipped-submi... https://jacobin.com/2020/10/tipped-restaurant-workers-waiters-coronavirus-subminimum-wage https://jacobin.com/2020/10/tipped-restaurant-workers-waiter... https://cepr.net/publications/customer-tips-are-providing-the-lions-share-of-wages-to-tipped-workers/ https://cepr.net/publications/customer-tips-are-providing-th...
- Aloisius 1y ago
  I live in California and this isn't true here. All restaurant workers receive at least minimum wage before tips. In my city, that's $19/hour with health insurance. Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out.
  - msikora 1y ago
    California doesn't have a special minimum wage for tipped professions? When I was waiting tables a long time ago I think my pay was $1.95 an hour. It was usually just enough to cover tax on tips (the ones we admitted).
    - Aloisius 1y ago
      Nope. Tipped workers are paid full minimum wage in California.
    - sundaeofshock 1y ago
      California has not had a tipped minimum wage since at least the early 2000s, and I can’t seem to find any information on what is in the 1900s.
    - rconti 1y ago
      Looks like it changed in 1988 due to a state supreme court ruling about a 1975 law. The law said the tips were the "sole property" of the employee and couldn't be counted by the employer as wages. https://www.latimes.com/archives/la-xpm-1988-11-01-mn-628-story.html https://www.latimes.com/archives/la-xpm-1988-11-01-mn-628-st...
    - jandrewrogers 1y ago
      They eliminated the special minimum wage for tipped professions in Seattle too, which is currently $20.76 per hour.
    - godelski 1y ago
      > California doesn't have a special minimum wage for tipped professions? NO STATE has a "special minimum wage for tipped professionals". MOST STATES allow tips to be *credited* towards wage, but NO STATE allows an employee to be paid less than minimum wage. There's a "special minimum wage THAT EMPLOYERS MUST CONTRIBUTE TOWARDS a tipped professional'S WAGE", but that's a very different thing than "the minimal amount of pay an employee may receive." The difference is where the money comes from: directly from employer vs directly from customer. But in all cases *the sum of these sources* must equal the minimum wage. If the employee is not taking home at least minimum wage, then the employer is guilty of wage theft. If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft. So instead, read the CA's (and AK, MN, MT, NV, OR, WA) rule as "tips may not be credited towards an employee's salary". [0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
      - FireBeyond 1y ago
        > If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft. See what your server's reaction is if you tell them to report this wage theft. They won't. They'll just suggest you tip them to compensate.
        godelski 1y ago
        They should. It's easy to report. Doesn't matter if nothing happens right away, because the more reports that accumulate the higher priority it becomes. So instead of trying to tell me how fruitless this is and just give up to endless arguments, maybe report wage theft if you know about it. You can do it anonymously. You can do it for people that tell you. It's not a hopeless situation. Hell, lawyers take payment after the case is won, and you know if your wage is being stolen then others are too
        kelnos 1y ago
        It's easy to report, but retaliation is a thing, and is hard -- and expensive -- to prove. Someone subject to wage theft is not the kind of person who can afford that trouble. And it's not like restaurant owners don't talk among themselves. Getting blackballed isn't great. Bottom line is that you seem to think that there's zero reason why people are shy about reporting wage theft. And yet so many people don't want to do it. Maybe try a little humility on and accept that maybe there are reasons you don't know about or don't understand. It's very easy to tell people what they should be doing when you don't have to walk in their shoes.
  - toomuchtodo 1y ago
    Seven states do not have a separate, lower minimum wage for tipped employees. Instead, they require employers to pay tipped employees the full state minimum wage, regardless of tips received. These states are Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Sixteen states use the federal tipped minimum wage of $2.13: Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming. https://www.epi.org/minimum-wage-tracker/ https://www.epi.org/minimum-wage-tracker/
    - godelski 1y ago
      > Seven states do not have a separate, lower minimum wage for tipped employees All workers, in every state, must be paid at least minimum wage. There's a subtle but important difference in wording. There is no "lower minimum wage" for any employee anywhere. The rule is that employers may credit tips towards pay, up to a certain amount. And they can never credit 100% of pay. So tipped employees should always earn: minimum_wage + stochastic_number "lower minimum wage for tipped employees" is incorrect and is just the interpretation of "minimum employer must pay after applying tip credits". Subtle, but very different things! If you aren't earning at least minimum wage (tips inclusive), then your experiencing wage theft. The DOL page[0] specifically says "Maximum Tip Credit Against Minimum Wage" and that's how the column "Minimum Cash Wage" is calculated, but under no circumstances[1] can the employer pay less than "Minimum Cash Wage". Anything less is illegal. ALSO under no circumstances[1] may an employee earn less than minimum wage. [0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped [1] We're ignoring allowed deductions like lodging and meal
      - shazbotter 1y ago
        This is a lot of words for a distinction without a difference.
        g3f32r 1y ago
        What's the minimum quantity of money a server can be paid after a 1 hour shift? If it's the same in both cases, that's his point.
  - jrockway 1y ago
    Yeah, there is a lot of shadiness going on these days. I don't think tips should be requested in any sort of transaction where the employee gets paid more than minimum wage. Restaurants always had this weird system where you could avoid paying your employees if they were tipped, so it was drilled into everyone's head "you're stealing from poor innocent workers if you don't tip 20%". But this is not the case for most workers, and so tips should be truly for exceptional service in cases where the job position is on a normal pay scale. This isn't to say that I don't tip when not required to or that I only tip people I think are being underpaid, but ... things have gotten a little out of control. If I feel like tipping, I'll tip. I do not need a prompt suggesting anything when it's not coming out of the employee's takehome pay. I hate to say it but I think some government regulation is required here.
    - atmavatar 1y ago
      Peak tip cynicism is when you're at an upscale restaurant where the wait staff are obviously being paid more than minimum wage, the bill automatically includes a gratuity (often 18% or more), and then on top of that, there's a line to include another tip.
      - 8n4vidtmkvmk 1y ago
        It's not a "tip" if it's included. Biggest scam ever.
      - the_snooze 1y ago
        Any fee or surcharge beyond the listed menu prices and associated taxes are a tip as far as I'm concerned. If the restaurant is going to be shady and unilaterally introduce confusion to an already confusing norm, then I consider that norm voided and fair game for any interpretation.
      - TylerE 1y ago
        Upscale restaurants that tip is often being split 5 or 6 ways... not just the primary server, but also the bartender, sommelier, food runners, etc.
      - 1y ago
  - godelski 1y ago
    > I live in California and this isn't true here I made a longer comment in the main thread[0] because I think there's a tendency for conversations about tipping to degrade as people are making different assumptions based on the different laws of where they're from or grew up. To be clear: - Any worker that is not making *at least the state's minimum wage* (including tips) is suffering from wage theft. (with the exception of Georgia (WTF)) - Any worker not receiving a positive valued check are suffering from wage theft - Tips only count as a credit and no state lets tips act as a 100% credit to the wage[1]. Credits may be amortized across "workweek" pay. We always need to make sure we distinguish a conversation about wage theft and a conversation about tipping. I think they are unknowingly being used interchangeably (or as an assumption in a conversation) [0] https://news.ycombinator.com/item?id=44751537 https://news.ycombinator.com/item?id=44751537 (sources linked here) [1] Federal only lets max credit of 70% of min wage. Some states go up to ~75% of min wage, but their minimum wage is higher than federal.
    - FireBeyond 1y ago
      Servers, often, seem to think it's our (the customer's) obligation to compensate for the sins of their employer. "Many restaurant owners illegally don't actually follow this law". "Report them to the DOL". "I don't want to do that. You should tip me to make sure I have a livable wage instead."
      - godelski 1y ago
        Perhaps this would happen less often if people didn't just spread hopelessness
        kelnos 1y ago
        Or maybe that's a logical reaction to the situation these people live in.
        godelski 1y ago
        Sure, it is logical. But that doesn't mean it is a good reaction. Certainly it doesn't help make the problem go away. Don't confuse "logical" with "correct" or even make the false notion that there is a "correct" reaction. The "right" reaction depends on your goals, short term and long term. But defeatist attitude results in a tragedy of the commons situation. It's social debt. Think of it like a mess. Messes are easiest to clean up right after they occur. But as time goes on, it becomes harder to clean. If everyone is doing their share of their work messes are very manageable. But if people don't do their share, then it must be picked up by everyone else, right? I think most of us have been in a situation where we've had to clean up "everybody's" mess (if you haven't, you might be that asshole leaving that mess). The defeatist attitude is like that person grumbling "it's too big of a mess, we'll never clean it up." Well... not with that attitude. If the mess needs to be cleaned up, it needs to be cleaned up. Either you help or you make it worse for everyone else.
  - radpanda 1y ago
    > even McDonalds is charging $15 for a 4 oz burger Jeez, where is this? According to the famous McCheapest map the most expensive Big Mac in America is about 8 bucks. Have prices really shot up that much recently? https://pantryandlarder.com/mccheapest https://pantryandlarder.com/mccheapest
    - Aloisius 1y ago
      https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?select=R3BH34nuGPP4mFiGMPxdOg https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?s... What got lost in an edit was that's for the combo with a bag ($0.25 extra).
      - deleted 1y ago
        [deleted]
  - wakawaka28 1y ago
    >Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. Don't tip, especially 20%, for over the counter service. That is ridiculous. >I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out. It's just a gimmick to get votes. The theory is that poor people tend to be the ones that work these jobs, they need a break, and it's not a policy that would cost very much anyway. There is a cap on the tips and most cash tips were going unreported anyway.
  - kelnos 1y ago
    I'm happy that CA doesn't set a lower min wage for tipped workers, but the problem is that in many/most places in CA, $19/hr is still not a living wage, so the tips are more or less required to keep those workers housed and eating. A living wage in most population centers in CA is nearly $30/hr.
    - deleted 1y ago
      [deleted]
    - Aloisius 1y ago
      People argued the living wage was $15/hour in California a few years ago. Then it was $20/hour. Now you're saying $30/hour. I have to ask what is causing what's considered a living wage to increase so rapidly, because it appears to be increasing far faster than the national inflation rate. It sounds like a wage-price spiral, though I'm not aware of anyone claiming we're in one.
      - 9rx 1y ago
        You are seeing an environment that is highly conducive to a wage spiral, but so far wages haven't shown reactive enough to find that a spiral has set in. Comments like the above indicate that it wouldn't take much of a spark to see it ignite, though. Granted, like a lot of things in economics, you can only tell in hindsight long after it has played out and the data is collected and analyzed, so it is also possible that the spiral is already underway and we just don't know it yet.
  - Aunche 1y ago
    It's actually even worse than that. The $19/hr and health insurance comes from increasing menu prices, so with flat percentage tips, you're paying more purely for the privilege of paying more.
chriscrisby 1y ago
That’s a weird way to say a sizable majority of tipped workers do pay taxes and will benefit from this.
- lawlessone 1y ago
  it's indirect tax credits for businesses that don't want to pay workers.
  - reissbaker 1y ago
    No, it isn't. It doesn't affect the wage they have to pay them. It just affects whether the employees need to pay taxes on tips.
    - micromacrofoot 1y ago
      it will absolutely affect the wage they are paid, it will be used as a constant excuse to not pay more than the legal minimum (2.13/hr as long as tips are greater than $7.25/hr)... probably used to justify additional tip stealing that happens pretty much everywhere, people will tip less because of it servers are treated like absolute garbage
      - amosslade 1y ago
        Good servers are treated well and make good money.
        micromacrofoot 1y ago
        This is nonsense for most jobs, and it's nonsense here too. Very rarely are any jobs treated on pure merit of good vs bad performance. Ultimately it ends up being mostly the luck of having reasonable management and good opportunities. Reasonable management is very hard to come by in the restaurant industry. And either way, if you wanted to believe the merit-based approach, you're talking maybe the top 5% of servers anywhere making "good" money. Wage theft in the industry is colossal. I will be pleasantly surprised if the removal of tax on tips does absolutely anything to move the needle for the bottom 95% of servers. The restaurant industry has been lobbying for this to further avoid the pressure of raising wages and the complication of reporting taxes — the reasoning is out there in the open. This is the sort of modern shell game where corporate interests further obscure costs to trick the lower class into thinking it's a good deal. It's akin to the math on maintenance Uber drivers tend to fail to do when they're calculating their wages... they're absolutely getting hosed and most of them don't even understand how.
limagnolia 1y ago
They may not pay any income taxes, but they almost certainly pay FICA taxes. If the NToT includes FICA, they would be better off. However, I still think it is terrible idea to advantage some employment classes and means of compensation over others like that.
- throw678937 1y ago
  [dead]
- ruw1090 1y ago
  No tax on tips does not apply to payroll taxes (FICA).
- fn-mote 1y ago
  Yes, creating special exceptions like this is an awful idea. More carve-outs complicating the tax code and pandering to specific constituents is a bad thing. It reminds me of listening to a story of how day care business owner-operators are not required by law to contribute to Social Security, don’t, and are then screwed at the end of their life because they don’t have any way to retire.

toomuchtodo 1y ago

https://jacobin.com/2025/07/restaurant-industry-tipped-subminimum-wages/ https://jacobin.com/2025/07/restaurant-industry-tipped-submi... https://jacobin.com/2020/10/tipped-restaurant-workers-waiters-coronavirus-subminimum-wage https://jacobin.com/2020/10/tipped-restaurant-workers-waiter... https://cepr.net/publications/customer-tips-are-providing-the-lions-share-of-wages-to-tipped-workers/ https://cepr.net/publications/customer-tips-are-providing-th...

Aloisius 1y ago
I live in California and this isn't true here. All restaurant workers receive at least minimum wage before tips. In my city, that's $19/hour with health insurance. Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out.
- msikora 1y ago
  California doesn't have a special minimum wage for tipped professions? When I was waiting tables a long time ago I think my pay was $1.95 an hour. It was usually just enough to cover tax on tips (the ones we admitted).
  - Aloisius 1y ago
    Nope. Tipped workers are paid full minimum wage in California.
  - sundaeofshock 1y ago
    California has not had a tipped minimum wage since at least the early 2000s, and I can’t seem to find any information on what is in the 1900s.
  - rconti 1y ago
    Looks like it changed in 1988 due to a state supreme court ruling about a 1975 law. The law said the tips were the "sole property" of the employee and couldn't be counted by the employer as wages. https://www.latimes.com/archives/la-xpm-1988-11-01-mn-628-story.html https://www.latimes.com/archives/la-xpm-1988-11-01-mn-628-st...
  - jandrewrogers 1y ago
    They eliminated the special minimum wage for tipped professions in Seattle too, which is currently $20.76 per hour.
  - godelski 1y ago
    > California doesn't have a special minimum wage for tipped professions? NO STATE has a "special minimum wage for tipped professionals". MOST STATES allow tips to be *credited* towards wage, but NO STATE allows an employee to be paid less than minimum wage. There's a "special minimum wage THAT EMPLOYERS MUST CONTRIBUTE TOWARDS a tipped professional'S WAGE", but that's a very different thing than "the minimal amount of pay an employee may receive." The difference is where the money comes from: directly from employer vs directly from customer. But in all cases *the sum of these sources* must equal the minimum wage. If the employee is not taking home at least minimum wage, then the employer is guilty of wage theft. If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft. So instead, read the CA's (and AK, MN, MT, NV, OR, WA) rule as "tips may not be credited towards an employee's salary". [0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
    - FireBeyond 1y ago
      > If the employer does not make at least $x towards an employee's wage, the employer is guilty of wage theft. See what your server's reaction is if you tell them to report this wage theft. They won't. They'll just suggest you tip them to compensate.
      - godelski 1y ago
        They should. It's easy to report. Doesn't matter if nothing happens right away, because the more reports that accumulate the higher priority it becomes. So instead of trying to tell me how fruitless this is and just give up to endless arguments, maybe report wage theft if you know about it. You can do it anonymously. You can do it for people that tell you. It's not a hopeless situation. Hell, lawyers take payment after the case is won, and you know if your wage is being stolen then others are too
        kelnos 1y ago
        It's easy to report, but retaliation is a thing, and is hard -- and expensive -- to prove. Someone subject to wage theft is not the kind of person who can afford that trouble. And it's not like restaurant owners don't talk among themselves. Getting blackballed isn't great. Bottom line is that you seem to think that there's zero reason why people are shy about reporting wage theft. And yet so many people don't want to do it. Maybe try a little humility on and accept that maybe there are reasons you don't know about or don't understand. It's very easy to tell people what they should be doing when you don't have to walk in their shoes.
- toomuchtodo 1y ago
  Seven states do not have a separate, lower minimum wage for tipped employees. Instead, they require employers to pay tipped employees the full state minimum wage, regardless of tips received. These states are Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Sixteen states use the federal tipped minimum wage of $2.13: Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming. https://www.epi.org/minimum-wage-tracker/ https://www.epi.org/minimum-wage-tracker/
  - godelski 1y ago
    > Seven states do not have a separate, lower minimum wage for tipped employees All workers, in every state, must be paid at least minimum wage. There's a subtle but important difference in wording. There is no "lower minimum wage" for any employee anywhere. The rule is that employers may credit tips towards pay, up to a certain amount. And they can never credit 100% of pay. So tipped employees should always earn: minimum_wage + stochastic_number "lower minimum wage for tipped employees" is incorrect and is just the interpretation of "minimum employer must pay after applying tip credits". Subtle, but very different things! If you aren't earning at least minimum wage (tips inclusive), then your experiencing wage theft. The DOL page[0] specifically says "Maximum Tip Credit Against Minimum Wage" and that's how the column "Minimum Cash Wage" is calculated, but under no circumstances[1] can the employer pay less than "Minimum Cash Wage". Anything less is illegal. ALSO under no circumstances[1] may an employee earn less than minimum wage. [0] https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped [1] We're ignoring allowed deductions like lodging and meal
    - shazbotter 1y ago
      This is a lot of words for a distinction without a difference.
      - g3f32r 1y ago
        What's the minimum quantity of money a server can be paid after a 1 hour shift? If it's the same in both cases, that's his point.
- jrockway 1y ago
  Yeah, there is a lot of shadiness going on these days. I don't think tips should be requested in any sort of transaction where the employee gets paid more than minimum wage. Restaurants always had this weird system where you could avoid paying your employees if they were tipped, so it was drilled into everyone's head "you're stealing from poor innocent workers if you don't tip 20%". But this is not the case for most workers, and so tips should be truly for exceptional service in cases where the job position is on a normal pay scale. This isn't to say that I don't tip when not required to or that I only tip people I think are being underpaid, but ... things have gotten a little out of control. If I feel like tipping, I'll tip. I do not need a prompt suggesting anything when it's not coming out of the employee's takehome pay. I hate to say it but I think some government regulation is required here.
  - atmavatar 1y ago
    Peak tip cynicism is when you're at an upscale restaurant where the wait staff are obviously being paid more than minimum wage, the bill automatically includes a gratuity (often 18% or more), and then on top of that, there's a line to include another tip.
    - 8n4vidtmkvmk 1y ago
      It's not a "tip" if it's included. Biggest scam ever.
    - the_snooze 1y ago
      Any fee or surcharge beyond the listed menu prices and associated taxes are a tip as far as I'm concerned. If the restaurant is going to be shady and unilaterally introduce confusion to an already confusing norm, then I consider that norm voided and fair game for any interpretation.
    - TylerE 1y ago
      Upscale restaurants that tip is often being split 5 or 6 ways... not just the primary server, but also the bartender, sommelier, food runners, etc.
    - 1y ago
- godelski 1y ago
  > I live in California and this isn't true here I made a longer comment in the main thread[0] because I think there's a tendency for conversations about tipping to degrade as people are making different assumptions based on the different laws of where they're from or grew up. To be clear: - Any worker that is not making *at least the state's minimum wage* (including tips) is suffering from wage theft. (with the exception of Georgia (WTF)) - Any worker not receiving a positive valued check are suffering from wage theft - Tips only count as a credit and no state lets tips act as a 100% credit to the wage[1]. Credits may be amortized across "workweek" pay. We always need to make sure we distinguish a conversation about wage theft and a conversation about tipping. I think they are unknowingly being used interchangeably (or as an assumption in a conversation) [0] https://news.ycombinator.com/item?id=44751537 https://news.ycombinator.com/item?id=44751537 (sources linked here) [1] Federal only lets max credit of 70% of min wage. Some states go up to ~75% of min wage, but their minimum wage is higher than federal.
  - FireBeyond 1y ago
    Servers, often, seem to think it's our (the customer's) obligation to compensate for the sins of their employer. "Many restaurant owners illegally don't actually follow this law". "Report them to the DOL". "I don't want to do that. You should tip me to make sure I have a livable wage instead."
    - godelski 1y ago
      Perhaps this would happen less often if people didn't just spread hopelessness
      - kelnos 1y ago
        Or maybe that's a logical reaction to the situation these people live in.
        godelski 1y ago
        Sure, it is logical. But that doesn't mean it is a good reaction. Certainly it doesn't help make the problem go away. Don't confuse "logical" with "correct" or even make the false notion that there is a "correct" reaction. The "right" reaction depends on your goals, short term and long term. But defeatist attitude results in a tragedy of the commons situation. It's social debt. Think of it like a mess. Messes are easiest to clean up right after they occur. But as time goes on, it becomes harder to clean. If everyone is doing their share of their work messes are very manageable. But if people don't do their share, then it must be picked up by everyone else, right? I think most of us have been in a situation where we've had to clean up "everybody's" mess (if you haven't, you might be that asshole leaving that mess). The defeatist attitude is like that person grumbling "it's too big of a mess, we'll never clean it up." Well... not with that attitude. If the mess needs to be cleaned up, it needs to be cleaned up. Either you help or you make it worse for everyone else.
- radpanda 1y ago
  > even McDonalds is charging $15 for a 4 oz burger Jeez, where is this? According to the famous McCheapest map the most expensive Big Mac in America is about 8 bucks. Have prices really shot up that much recently? https://pantryandlarder.com/mccheapest https://pantryandlarder.com/mccheapest
  - Aloisius 1y ago
    https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?select=R3BH34nuGPP4mFiGMPxdOg https://www.yelp.com/biz_photos/mcdonalds-san-francisco-61?s... What got lost in an edit was that's for the combo with a bag ($0.25 extra).
    - deleted 1y ago
      [deleted]
- wakawaka28 1y ago
  >Of course, you're still expected to leave a tip and suggested minimum is now 20%, plus even McDonalds is charging $15 for a 4 oz burger, so I rarely go out to eat at places that expect a tip anymore. Don't tip, especially 20%, for over the counter service. That is ridiculous. >I'm not sure why they specifically should be tax exempt though. Cash tips often were, practically speaking, so a lot of tax evasion was happening, but it still seems odd to single them out. It's just a gimmick to get votes. The theory is that poor people tend to be the ones that work these jobs, they need a break, and it's not a policy that would cost very much anyway. There is a cap on the tips and most cash tips were going unreported anyway.
- kelnos 1y ago
  I'm happy that CA doesn't set a lower min wage for tipped workers, but the problem is that in many/most places in CA, $19/hr is still not a living wage, so the tips are more or less required to keep those workers housed and eating. A living wage in most population centers in CA is nearly $30/hr.
  - deleted 1y ago
    [deleted]
  - Aloisius 1y ago
    People argued the living wage was $15/hour in California a few years ago. Then it was $20/hour. Now you're saying $30/hour. I have to ask what is causing what's considered a living wage to increase so rapidly, because it appears to be increasing far faster than the national inflation rate. It sounds like a wage-price spiral, though I'm not aware of anyone claiming we're in one.
    - 9rx 1y ago
      You are seeing an environment that is highly conducive to a wage spiral, but so far wages haven't shown reactive enough to find that a spiral has set in. Comments like the above indicate that it wouldn't take much of a spark to see it ignite, though. Granted, like a lot of things in economics, you can only tell in hindsight long after it has played out and the data is collected and analyzed, so it is also possible that the spiral is already underway and we just don't know it yet.
- Aunche 1y ago
  It's actually even worse than that. The $19/hr and health insurance comes from increasing menu prices, so with flat percentage tips, you're paying more purely for the privilege of paying more.

chriscrisby 1y ago

That’s a weird way to say a sizable majority of tipped workers do pay taxes and will benefit from this.

lawlessone 1y ago
it's indirect tax credits for businesses that don't want to pay workers.
- reissbaker 1y ago
  No, it isn't. It doesn't affect the wage they have to pay them. It just affects whether the employees need to pay taxes on tips.
  - micromacrofoot 1y ago
    it will absolutely affect the wage they are paid, it will be used as a constant excuse to not pay more than the legal minimum (2.13/hr as long as tips are greater than $7.25/hr)... probably used to justify additional tip stealing that happens pretty much everywhere, people will tip less because of it servers are treated like absolute garbage
    - amosslade 1y ago
      Good servers are treated well and make good money.
      - micromacrofoot 1y ago
        This is nonsense for most jobs, and it's nonsense here too. Very rarely are any jobs treated on pure merit of good vs bad performance. Ultimately it ends up being mostly the luck of having reasonable management and good opportunities. Reasonable management is very hard to come by in the restaurant industry. And either way, if you wanted to believe the merit-based approach, you're talking maybe the top 5% of servers anywhere making "good" money. Wage theft in the industry is colossal. I will be pleasantly surprised if the removal of tax on tips does absolutely anything to move the needle for the bottom 95% of servers. The restaurant industry has been lobbying for this to further avoid the pressure of raising wages and the complication of reporting taxes — the reasoning is out there in the open. This is the sort of modern shell game where corporate interests further obscure costs to trick the lower class into thinking it's a good deal. It's akin to the math on maintenance Uber drivers tend to fail to do when they're calculating their wages... they're absolutely getting hosed and most of them don't even understand how.

limagnolia 1y ago

They may not pay any income taxes, but they almost certainly pay FICA taxes. If the NToT includes FICA, they would be better off. However, I still think it is terrible idea to advantage some employment classes and means of compensation over others like that.

throw678937 1y ago
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ruw1090 1y ago
No tax on tips does not apply to payroll taxes (FICA).
fn-mote 1y ago
Yes, creating special exceptions like this is an awful idea. More carve-outs complicating the tax code and pandering to specific constituents is a bad thing. It reminds me of listening to a story of how day care business owner-operators are not required by law to contribute to Social Security, don’t, and are then screwed at the end of their life because they don’t have any way to retire.