13 ms·
“No Tax on Tips” Includes Digital Creators, Too
- aspenmayer 1y agohttps://archive.is/8T9t0 https://archive.is/8T9t0
- jollyllama 1y ago$1 subscription, but "This content is only available for my top 1,000,000 fans" ranked by tips.
- aspenmayer 1y agoOooh, I like this. Reminds me of charity auctions.
- zappb 1y agoThat must be where Onlyfans was inspired to emulate the business model.
- aspenmayer 1y agoMore like chastity auctions, am I right?
- pcthrowaway 1y agoThe exemption doesn't apply to performance artists
- deleted 1y ago[deleted]
- nicce 1y agoI like the idea. How to implement in transparently in away you aren't always the 1,000,001 one?
- kevin_thibedeau 1y agoService provided by Patreon.
- EliRivers 1y agoOkay, so if I had some employees working jobs that are part of this, could I give them a tip? Could I give them 25000 dollars of tax free tip.
- aynyc 1y agoI think the tip here is defined as customer directly to employees. I'm sure an enterprising tax attorney can come up with ways to help your idea.
- lotsofpulp 1y agoAn employer is an employee’s customer.
- ta1243 1y agoAs a contractor my customer pays me $2k a day. Instead they could pay me $20 a day and $1800 a day in tips. Everyone wins.
- aynyc 1y agoIn 14 days, you hit the cap. In 75 days, you start to hit the phase out band.
- deleted 1y ago[deleted]
- exabrial 1y agoLove this. Step in the correct direction. Property Taxes are coming under fire next, and given their long racist history, it's about time.
- crazygringo 1y agoIs it? Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just? Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?
- bdcravens 1y agoIt's not about benefitting the employees, but the employers. It's meant to push back against livable wages.
- alchemical_piss 1y agoThe employers already had all kinds of bizarre tricks to keep tipped workers down. My girlfriend works for a local chain restaurant. Some of the things she tells me about seem like they shouldn’t be legal (forcing everyone’s cash tips to be pooled with non tipped teenagers they don’t want to pay, for example. Pretty sure the company has had previous class actions against them. This was just a small local chain in a middle/upper middle class suburb. I saw a post on Nextdoor the other day where another restaurant closed, laying off the workers without paying them for hours worked. The general consensus about how to get the money you worked for: you don’t. The state has no labor board and there was little option for recourse.
- ndriscoll 1y agoNot that I'm a fan of tipping culture or the "creator" economy, but it seems like tips and donations to your favorite youtuber are obviously gifts to me? From irs.gov: > You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. Which is obviously true for tips and donations. If it is a gift, then the giver owes taxes, and there is a $19k/year/recipient exclusion, so small gifts like this would always be exempt.
- arctics 1y ago"No Tax on Tips" meant for low income taxpayers so most of the major digital creators won't qualify. Low income digital creators can deduct upto 25k in tips, so if their income from tips and other sources is below $150k a year, their taxable income will be 25k less.
- cma 1y agoMedian single income in the US was around $45,000 in 2024. $150K is not low income. It goes to $300K if filing jointly. Major creators may still not get much since it's a power law distribution, but the tips thing is in no way limited to low income.
- arctics 1y agoGenerally correct, low income digital creators will benefit the most since "No Tax on Tips" will reduce their taxable income by 50% or more in comparison to someone who earns close to 150k which isn't a low income according to BLS as you pointed out.
- cma 1y agoIf you look at tax brackets plus the standard deduction lowering the bracket it affects, it will be a flat or regressive change in take home income amongst the cohort until at $90K or maybe a bit more, double median income, where you can start writing off against the 22% bracket. Assuming 50% tips.
- NooneAtAll3 1y agoI have no measure of scale on 150k dollars a year in terms of creators scale... I remember something like 2k$ youtube ad revenue for 1M views, so that's like 1M video every 4 days? or was it 2M views per 1k dollars, then it's 1M video every day?
- ThrowawayTestr 1y ago$1 per 1000 views is a good estimate. Depends wildly on content.
- yunohn 1y agoTruly bizarre how this is playing out - was the digital creator carve out requested by the various right wing streamers that are part of Trumps’s core sycophant club? Doesn’t make any sense.
- richwater 1y ago"No Tax On Tips" is so stupidly regressive and yet another addition to the complex tax law. Somehow we decided a waiter making 100k with tips needs more help than a stock worker at Walmart.
- pessimizer 1y agoIt isn't "no tax on tips" that's regressive, it's tips themselves. If tips are a gift, then they should be taxed as gifts are taxed. End tips and raise wages, and the taxes cease to be confusing or controversial. For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children.* Why do they get to do this? Or to take it to absurdity, why aren't my donations to charities taxed? What's the reason for the carveout? Should I instead donate earmarked cash to a charity that provides assistance to underpaid waitstaff? [*] If you didn't hear that the other half are getting this, now you know: https://www.savings.com/insights/financial-support-for-adult-children-study https://www.savings.com/insights/financial-support-for-adult...
- deleted 1y ago[deleted]
- kelnos 1y agoWell, this year I suppose it will be $1,583.33. That's just the gift tax exclusion ($19k this year) at work. I don't really see a problem with it. People should be able to give money to family members without penalty. > End tips and raise wages, and the taxes cease to be confusing or controversial. Some businesses have tried this, but often it doesn't work out. To make this financially feasible, it would require action at the federal and state levels to 1) eliminate different tipped vs. regular tax rates (some places have done this already), 2) and modify how payroll taxes work to even things out a bit. It sounds like "oh, no problem we'll just raise prices by 20% to cover the extra salaries". But no, that doesn't work, because businesses and individuals are responsible for payroll tax on non-tipped salaries. And there's a collective action problem at play: take two identical restaurants. One follows the now-standard model of accepting tips, and ~20% is customary. Their identical competitor won't accept tips, pays their staff better, and charges 20% more for their food. Fun outcome: people get sticker shock at the second place and go to the first place instead, even though in the end they pay exactly the same amount. Human psychology is dumb, and restaurants know this, so they won't do this unless all their competitors are also required to do it. (This is also why in the US prices are advertised tax-excluded; pricing that includes tax is viewed as more expensive, even if the final charge is the same.)
- busymom0 1y agoI use "tipping" in my Hacker News app Hack. Basically users can tip an amount they pick. Would such "no tax on tips" apply to that too?
- dlcarrier 1y agoIf it's free for all users, and you don't provide any benefit to those "tipping", it's already an untaxed gift in the US, if no individual gifts more than $19,000, and even then, the gift giver would pay any taxes. Tips require a customer relationship to exist.
- bitshiftfaced 1y agoI don't like the idea of even more expectations for tips, since we're already tip-fatigued. Despite that, I'd rather have less rules and taxes and have them actually enforced than have a situation where people pocket the cash portion of their tips untaxed anyway, which only punishes honest people.
- RankingMember 1y agoIt's pernicious. I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server (in the places I've been to, it is). Tipping needs to die and it's frustrating to see it starting to proliferate in some European countries.
- lotsofpulp 1y agoJust hit the zero tip option and move on with life. If a seller can’t advertise the price sufficient to sustain their business, that is their problem.
- ryandrake 1y agoWith a small amount of sadness, this is the conclusion I'm starting to end up with. Yes I think waitresses and service workers should make more money. But tipping in the US has become opaque, expanding everywhere, and the expectations around tipping seem to be getting ratcheted up constantly. A business is not viable if customers have to pay your employees separately. I'm close to hitting the nuclear button and just defaulting to zero.
- KPGv2 1y agoMy bright line rule is that I won't tip before service is rendered. If I'm asked before, I can't judge the service, and therefore making a tip decision is impossible.
- deleted 1y ago[deleted]
- hypeatei 1y ago"no tax on tips" was a pandering move to the mostly financially-illiterate populace that still don't understand progressive tax systems. Singling out certain types of income makes no sense and is very unfair. I wouldn't be surprised if this actually ends up resulting in less tip income over the long term due to people going "wait my income is taxed but theirs isn't, why should I tip as much?"
- nickthegreek 1y agoDon't worry, no tax on tips actually phases out relatively quickly (2028) while the tax cuts enacted for the 1% are there to stay. edit: fixed year typo
- koolba 1y agoExtending the 2017 tax policies, specifically continuing the capping of SALT deductions, leads to higher taxes for high income earners. That deduction was worth $100K to a $1M/year income in a 10% State income tax state earner. Even more when you add in property taxes. If they had not been extended the taxes for those high earners would have dropped for 2025 and beyond. The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
- ceejayoz 1y ago> the top 1% still pay 40+% of federal taxes No. They pay 40% of Federal income tax, specifically. https://nymag.com/intelligencer/article/fact-check-richest-1-dont-pay-40-of-the-taxes.html https://nymag.com/intelligencer/article/fact-check-richest-1... > The bottom 50% pay no taxes Same mistake here. They pay plenty of payroll etc. tax.
- loeg 1y agoThe numbers from your link are: The top 1% pays 24% of Federal taxes, and the bottom 50% pays somewhere between 7% (bottom 40%) and 16% (bottom 60%).
- hshdhdhj4444 1y agoNo tax on tips is the kind of policy you’d come up with if you were creating a caricature of the far left. And yet, in today’s America that’s the major economic policy of the leader of the Republican Party.
- hypeatei 1y agoWell, it's a very populist move and the extremes of either party will go down that road to get votes. Far right parties are generally for social programs as long as the wrong people don't get them.
- dlcarrier 1y agoIt has broad bipartisan support and was one of very few policy changes promised by the Harris Walz campaign. Conservatives like it, because it is effectively a de minimus exemption on taxes, simplifying the tax collection process, and liberals like it because it results in more progressive taxes, with tip earners overrepresented amongst low-income earners.
- standardUser 1y agoIt does nothing to simplify the tax code, and it opens up a universe of loopholes. The concept may have some merit, but the implementation is sloppy and lazy.
- ryandrake 1y agoI think ultimately very few people really care about simplifying the tax code. The cost of a complex tax code is the $19.95-$200 cost of preparing your taxes, which everyone would gladly eat if it meant they could take advantage of tax deductions on pages 1,455, 19,210 and 245,908 of the tax code totaling > the cost of tax prep.
- dlcarrier 1y agoSimplifies tax collection process ≠ Simplifies tax code A few lines of tax code means millions of people don't have to worry about unpredictable withholdings due to significant changes in tips from day to day, month to month, and year to year. Also, what's sloppy about it? It's just a deduction for up to a maximum amount from tips, for a specified list of occupations, with the maximum decreasing as income increases above a specified level. That's pretty simple, as far as tax code goes. What do you think would be a less sloppy way of implementing it?
- Luker88 1y agoDoes the opposite movement exist? Like "No Tips". Pay your employees, pay your taxes. No nonsense on dividing tips between people that I did not interact with, minimum tipping, or with automated machines. Tipping also means that if I want to know how much I'll spend in your restaurant I will have to decide how much I tip even before I walk in. This is all just tax evasion with extra steps, enabling exploiting of people that have less contractual power.
- downrightmike 1y agoSort of, but they chose to outsource instead of paying people/taxes
- codedokode 1y ago> Does the opposite movement exist? Japan?
- bertil 1y agoMost of the world, really. Japanese people are offended, so don’t do it there. People in other places tend to be flattered, so you can, occasionally. But the idea that you should pay your employees a living wage has been a well established principle since the 19th century.
- jedberg 1y agoI've found outside the USA they tend to be confused when I tip. Or they will look me right in the eyes and say, "American, yes?".
- kccqzy 1y agoI've found that when I go to restaurants outside the U.S. without speaking their native tongue they often ask where I'm from. Answering that you are from the U.S. will make the servers overly friendly and then they will ask for a tip.
- throw0101a 1y agoPSA: the "No Tax On Tips" provision expires: > New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137. * https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-... There's also a maximum of $25k/year (~$2k/mo).
- jagged-chisel 1y agoIs that maximum $25k in tips, or in total income that includes tips?
- junar 1y agoI think one aspect that is understated: "No Tax on Tips" is only a deduction for the purposes of federal income tax. W-2 workers still owe FICA and other payroll taxes on such income, and similarly self-employed workers would still owe self-employment tax. To me, a more appropriate name is "Some taxes on tips".
- onlyrealcuzzo 1y agoAnd most of their tax is already at the state level or FICA, so it's more like, "most taxes on tips, unless you make decent money, then you bet a break." But that's not winning an election.
- 1oooqooq 1y agoof course this administration did something that help sites like only fans.
- conductr 1y agoI’m more concerned with no tip on taxes. Sales tax is usually in the subtotal that tip percentage are calculated on. Most POS I’ve seen do this way
- johncolanduoni 1y agoBefore someone is confused: POS here means “Point of Sale”, not “Piece of …”.
- retired_account 1y agoRoughly equivalent anymore, though.
- deleted 1y ago[deleted]
- b3ing 1y agoSo I can do a deal for $1 then ask someone to pay the other $100k in tips?
- romanovcode 1y agoClose, but not really. 25k a year is the limit. So you could do a deal with $1 and $25k per year.
- gregjw 1y agoOh nice, congrats to all US digital creators.
- Woodi 1y agoNah... "Digital creator" is dream full time job so 25k / y is not so much. So tax still applies :)
- billpg 1y ago"Would you like to leave a tip for your server?" "20%." "And the cook?" "What?" "The cook wants in on the no-tax-on-tips so we're asking how much you'd like to tip him. We're also going to ask for the cleaner and the guy who delivered the ingredients earlier this morning."
- sebtron 1y agoIf you think this is absurd, this is how I feel, coming from a non-tipping country, when I read about the tipping culture in the US.
- epolanski 1y agoThe toxic tipping culture is spilling abroad too. Several restaurant owners are advocating in Italy to make 20% tips mandatory so they can reduce their costs.
- robertlagrant 1y agoIt's not "spilling abroad". Italy had tips built into their bills when I went there over 20 years ago.
- mystifyingpoi 1y agoThat's just paying with extra steps.
- epolanski 1y agoNonsense. What you're referring to as "tip", is the coperto. It's a minimal, fixed, optional fee that includes service, bread and table setting. Not every place makes you pay it, it's more common in more expensive restaurants, but still, it ranges from 0 to an average 2 euros per person. Comparing it to %-based mandatory tips in US is nonsense.
- kamma4434 1y agoIn Italy tips are never required as are a part of what you pay for. You leave a tip for outstanding service if you want, but it’s neither mandated nor customary.
- bilekas 1y agoGreat, another way companies can offload the responsibility of looking after their staff to the customer. It sounds like a win for the employee, "ah but you don't need to pay tax on your tips". But in reality it's government saying "The company you work for owes you nothing, take it from the customer".
- skeezyboy 1y agowhy havent nurses and doctors (ya know, actual life savers) been historically tipped? whats so special about waitresses?
- romanovcode 1y agoBecause it encourages corruption. Doctors would prefer to work with patients who tip is not something you want to see. Even worse example would be "Why can't I tip a police officer? ;)"
- ahoka 1y agoHistorically you would pay with cash for your food and sometimes counting change would be awkward so you just round up.
- skeezyboy 1y agotipping isnt giving someone your spare change is it lol
- volkadav 1y agodoctors and nurses have enough power to demand fixed professional(0) wages that "unskilled labor"(1) does not. no one _wants_ to make $2/hr(2) and to have to rely on the generosity of the general public for a living; in other words, it isn't the waitstaff having special privileges but rather the opposite case of them lacking better protections. (0) which is to say, much higher (1) a propaganda term if there ever was one. work one shift as a waiter and tell me it take no skill afterwards! (2) $2.13 barring state-level increases over the federal minimum, to satisfy the pedants
- pcthrowaway 1y ago> The act also provides that tips do not qualify for the deduction if they are received “in the course of certain specified trades or businesses — including the fields of health, performing arts, and athletics,” So buskers have to declare their tips, but servers don't?
- zupa-hu 1y agoIn my book, asking for a tip is called begging. A tip is voluntary.
- darig 1y ago[dead]