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this post was submitted on 14 Aug 2024
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If the hand we're playing is such that we cannot feasibly raise the service minimum wage and abolish tipping, but we can exempt tips from taxation, I don't see any reason not to take that action.
But it seems theatrical. How much revenue does US actually take in from this type of income? I bet it doesn't even make an impact. May as well use it as a political tool with the side effect of helping some workers too.
Until we can figure out a better way to have society. I just don't see the downside.
The reason is that the government is now subsidizing poverty wages and encouraging those business models instead of letting them crash and burn for a lack of willing wage slaves like they should.
That's another great point thanks
The article explains that one obvious downside is it'll put downward pressure on base wages for these employees, with the justification that their take home pay will remain the same. And I expect that's exactly what would happen.
Because the rich are obviously going to use this as a loophole to give money to each other tax free, now that NFTs and Bitcoin have kinda tanked. They need a new way to legally pay for illicit goods, and tips are pretty good for that. Do these tips even need to be reported if they aren't taxed anyway? Just like gifts under $10k don't need to be reported.
That's an interesting angle for sure