Read. My. Lips.
As sure as my real name is Dr_Paprika… No longtime member of the Straight Dope will have to pay state or federal taxes again!
Also, why doesn’t the cafeteria serve more pizza and tacos. And lunch three times a day?
Trump is every bit as credible as the motormouths who ran for class president when you were still in short pants.
Of course there is. An election goal. It’s an appeal to workers in the service industry and specifically a play for Nevada. Economically it is a bad idea.
Yes there would be a huge incentive for other industries to move towards making tips more of the income. Of course there is the risk of being stiffed on the suggested 20% tip for the workers. But mostly consumers do not do that. If we know a tip is expected even though not required we pay it, even if the service was lousy. If it is the expected behavior then the same would occur when a tip is expected for your car repair or air conditioner maintenance. The small number who do not tip in that circumstance are offset by the tax savings and likely will have a harder time getting service in the future.
Better to get rid of tips and raise wages.
I do not think this is a bad idea. I disagree. I would rather see that tipped employees have to be paid minimum wage, no exclusion for them, but this is not a bad idea.
I went to a no-tip restaurant tonight. The server said they are on a salary and have benefits.
Sounds fine to me, as long as we know in advance.
There surely is an upward trend in tips (and social expectations about the “appropriate” amount of a tip). But I’m not sure it’s because of credit card fees. I suppose there is a social dynamic at play whereby people who want to feel particularly generous and well-off tip above the social expectation, and then after a while this moves up said expectation so that the above-average tippers have to up their amount even further.
That brings up the vexed question of why people tip. I don’t tip to feel generous or reward people for their job. I tip because I have to, and I now tip 20% because it’s not the server’s fault that I have to.
I don’t really think people should be taxes on tips, but then, I don’t think employers should be able to rely on tips as wages, nor to avoid any payroll taxes. But here we are, and the proposals would only further entrench the system.
It does seem that by not reporting tips as wages, an employee would only have $4260 ($2.13/hr times 2000 hrs) of creditable SS income every year. If they worked as a tipped employee their entire career, that’s 35 years of SS earning of only $4260 each year. Unless such an employee has access to and utilizes other retirement plans such as a 401k (perhaps unlikely to be available in a tipped wage industry?) or an IRA (available, but with low contribution limits), they will probably have little assets in retirement and low SS benefits. I suppose employees would rather have more money in their pockets now, but such limitations would increase the wealth divide, and non-tipped employees seem that ultimately they are at a pretty substantial disadvantage later in life.
Gah! I meant tipped employees are at a disadvantage later in life.
I remember people used to tip 10%.
I’m someone who doesn’t like tipping, and I would prefer we do away with the custom. People for tips argue it is a way for the customer to motivate service, but I’m skeptical. That might work somewhere with regular use, where the server and customer regularly interact. Then they can establish a regular expectation.
But for one-off interactions, either the server has to try to judge the patron, or provide service on the hope the patron will give a good tip.
And some people like to use tipping as a status tool, a form of bragging.
A better method is employers monitoring service and holding employees accountable. Regular customer complaints lead to discipline. Observed substandard service leads to discipline. Employees hold each other accountable based on who is carrying their share of the workload.
I don’t like it for restaurant workers. US tax code allows restaurants to have a lower minimum wage for tip workers, as long a the tips make up the difference. I would prefer true pricing. Pay emplyees fair wages. If that drives up prices, at least that is transparent, as opposed to expecting customers to add on to the stated bill.
True pricing and true expenses protect the workers. If that means people eat out less, that means we know how the economy is working.
I’m also worried about the law of unintended consequences. Instead of giving service workers a bonus, it will change payment policies whereby employers will shift employees to more tips over wages. Any gains they would have gotten will be soaked up by employers paying less directly. Except where explicitly controlled, like restaurants, where as mentioned is already slated in employers’ benefit.
Also, the fact that Donald Trump is for it makes me suspicious. I heard someone on CNN saying that he’s doing it not for low wage workers, but that big execs will shift commissions and bonuses to tips.
I guess I can hope this is one of these campaign promises that doesn’t actually get legislated.
Yes, tip growth is inherent to the process. A normal tip is x, so a special tip then has to be x + y. So people want to be good tippers, they start paying x + y regularly. So that becomes the standard tip, and now you have to add z to be special. And it keeps growing.
Only 16 states use the $2.13/hr wage base. A small number of states require employers to pay the full minimum wage before tips (which is higher than the federal minimum wage by a bit or a lot, in some cases double). Other states have wildly varying rules. But even so, in the hard-nose full-minimum-wage states, reports crop up from time to time of employers trying to find ways to game the system.
The current market forces of low unemployment rates, would drive most if not all restaurants to pay much more than $2.13/hour just to get people to work. No employee in their right mind would work for a restaurant that is only paying $2.13 + tips to get to the Federal min wage of $7.25/hour, when they could walk down the street to a McDonalds and very likely make more than $15/hour.
These statutory rates are the minimum…not what is actually being paid.
But if a restaurant has the right to refuse service because you don’t tip, is it really optional?
yes, it’s optional for you to go elsewhere?
What I would like to do is give the server a tip in cash, and if they choose not to report it all I sure don’t mind.
How, since you pay after you eat?
Theoretically they can ban you from the establishment after the first or second time.
I had an issue in a Dutchess County NY diner in the 1990s where they wouldn’t seat my wife and me because they thought we were someone else, an Indian-Chinese couple who didn’t tip. Or maybe they just thought all Asians are bad tippers.
Likewise. But we will pay the lions share with CC with 22%, and stick 5 in cash in with it.
You just need a better system for establishing the size of the tip.
