The Problem With No Tax On Tips

[gab13by13]

Are corporations going to abuse this and start paying executives compensation and calling it tips?

Do not put it past the greedy bastards.

[Voltaire2]

1. It's trivial to restrict the rule to specific types of workers.

For example a simple non-tip wage income limit.

[Tadpole Raisin]

2. I think I heard that's why Kamala's plan limits it to certain workers

Like hospitality (waitresses etc.,) so that Wall Street types can’t shift their income and call it tips to avoid taxes. They are such an honest group, ya know.

They might be slippery weasels but she is wise to them!!

[pat_k]

3. I think we can almost guarantee there will be a cap and that it will be tied to minimum wage hike.

I also think it would be better accomplished as a deduction, so the income is reported and SS is paid on it, but Federal Tax is relieved by having a deduction of up to $10,000 or whatever. Perhaps even as much as what the current gift exemption is.

Whatever legislation is put together, I have no doubt it will be very clear that it is limited to job categories that tips have been used as leverage to allow a reduced minimum wage.

[EarnestPutz]

4. Bonuses and stock options aren't enough?

[multigraincracker]

5. Most that live on tips and low pay

have no insurance, vacations or OT pay. Except for SC judges.

[gab13by13]

6. People who get tips

get the money from strangers, not from their employer. Some kind of language would be needed in that regard or a corporation could change bonuses to tips.

[Stargleamer]

7. Yes this quite problematic. . .

https://www.electoral-vote.com/evp2024/Items/Aug13-4.html

We want government programs to be well-funded—we need to assess how to make up for this lost revenue

[Voltaire2]

9. Well perhaps raising taxes on the very wealthy

instead of relying on revenue from people waiting tables would be a better idea.

[Stargleamer]

10. I'm all in favor of doing that. . .

Being someone who supports Bernie on such matters. But if we can’t win the House, and the Senate as well as the presidency, we won’t be able to pull that off. In such a case we should seriously consider the drawbacks as well as the benefits such a loss of revenue would result in

[lastlib]

8. (I suspect the IRS would....

look a little askance at millions of $$ in "tips" from an employer.....)