Tipping Waiters
Open Thread for Talk. You can talk about tipping waiters or you may choose a different topic.
Initial topic is “tipping waiters.” When we go to dinner, we expect good service and usually get it. A good waiter is typically checking on the restaurant guests and being attentive to their needs. The exchange should be polite on both sides. The typical Tip is 20% which is the least we will give if the wait staff service is poor. Mostly, we will tip 30% to 50% in cash. And the reasons why are discussed below.
“Want To Help Low Wage Workers? Dump No Tax on Tips and Pass the Raise the Wage Act,” CEPR
“The No Tax on Tips Act initially sounds good for hard working folks, especially as it is usually the rich who benefit the most from tax breaks. The bill exempts up to $25,000 in tips from federal income (not FICA) taxes for those earnings up to $160,000. But a closer look shows that the bill is unfair and it makes little sense — especially when more broadly based and effective policy options are at hand.
The bill is poorly targeted. The tax break only applies to a very small share of the workforce, about 2.5 percent. It also bypasses most low-wage workers as only 5 percent of those earning less than $25 per hour earn tips. Rendering it even further off the mark is that one in three tipped workers do not earn enough to pay income taxes. This bill does nothing for the majority of the one in ten workers earning below $15.00 an hour.
This policy nets out too many deserving low wage workers.”
Tipping in cash is already a huge step towards not reporting income, so not sure how excited lots of traditionally tipped workers are about a no tax provision. Conceivably it might encourage more reporting so as to participate in Social Security at an higher level of lifetime earnings. Incorporating tipped employees into normal wage law provisions I think will end tipping as we have known it. Could take a decade as habits aren’t easy to break. But it will dawn on folks that the “habitual” base tip has shifted to the price of the invoiced service, so a tip will be reserved for some truly higher, unexpected, service.
Eric:
Not sure what planet you are from. It is a struggle in many cases for people. Wait staff gets by on a small stipend from the company they work for with the idea they can get enough in tips.
How they report their income, which they do, and how they report tips (which I am sure the IRS knows they get once they list some type of company they work for or occupation), is widely up to them. IRS going after a waiter for not declaring 100% of their tips? It has to be worth something to go after someone for a few $thousand in income. They, we do not have such resource to claim for deductions.
I treasure good service. When we are there again, they do remember us and the service is better.
Why not worry about those who take thousands of dollars in deductions for something which they really do not do? Or is taking advantage of the low in income your pleasure?
addendum:
Eric:
Why not worry about those who take
thousandsmillions of dollars in deductions for something which they really do not do? Or is taking advantage of the low in income your pleasure?Corporate and owners are not going to get into a situation where they must provide other employment services such as healthcare, paid vacation, etc. They keep them in such a situation to avoid salary as well. Part time status works for the owners and not so much labor.
I hate tipping.
Have reduced my USA dining.
Love dining in Europe.
Dave:
We have special places we go to eat. We usually get the same waiter each time. It is like building a relationship. They get to know what you like and make suggestions. Develop a trust. Done the Europe scene, Germany, Czech Republic, eastern France, Switzerland, and then there is Asia. The service is good there. What was your experience in Europe? Likes, dislikes?
Except on weekends, my trips were work related. Germans gave me a car.