Could this be why Trump called for tax free tips?

[Kingofalldems]

I was in a well known sandwich shop and when I paid I asked the lady if she wanted a cash tip or should i include it in my credit card payment. She said cash please as the company takes part of her tips when using a card. I found that interesting.

[underpants]

1. It's empty pandering BS that'll never happen

and Harris shouldn’t have chased him down that rabbit hole.

The company taking part of the tips is horrible. Virginia now assumes 15% on dining and taxes the server as such. Gone are the days when every declared 1/3 of their actual tips.

I tend to give anything over 20% as cash on tips.

[getagrip_already]

2. In MA at least, that is illegal....

Not only cant the company take a portion of tips, management cant participate in tip sharing.

Tip sharing is where tips are pooled and a portion is given to back line staff, table bussers, dishwashers, etc.

Tip sharing is ok, but management cant participate.

[Ocelot II]

3. He's pandering. Anyhow, wouldn't Trump and the GOP

want the credit card companies to get the money?

[mercuryblues]

4. That wasn't a thing when I waited tables

I preferred cash, because You didn't have to claim it all. Claim enough for it to net be questioned. My actual paycheck averaged $1per hour after taxes were taken out.

What is probably happening is the credit card company charges a fee to the Service provider, and they are passing it down to her.

[haele]

5. Most restaurants do that with electronic tips.

The kidlet is a GM for a small restaurant chain, but she's also worked in large national chains.
Most restaurants typically pull 1/3 of an electronic tip for the cooks, "hosts"/cashiers and bussers where it's taxed.
Tips that aren't given directly to the wait staff or bartender (Take out tips, tip jar or a busser takes off the table) get counted at the end of the shift and divvied up between the kitchen and front of the house.
And it gets recorded on their paystubs and taxed.
That's most restaurants. The popup stand, food truck, or Mom's kitchen type place might have a different system.
And of course, there's the skeevy restaurant management types that abuse the system, leaving the tipped staff still working for 1/3 minimum wage and pocketing any tip jar or cash tips for themselves and skim off the top any rounding up or credit card tips.

Haele

[eppur_se_muova]

10. Thanks for the info. It's fine when cooks, dishwashers, etc. share in the tips but it would be nice to know up front.

If I know the server doesn't keep the whole tip (something I can seldom even guess at), I'll tip more. Money is so tight I haven't eaten out in ages, but when I do, I try to remember the employees may be pretty tight too.

Oh, and I always tip cash unless I stupidly forgot to fill my wallet. Usually happens when I'm celebrating with family -- bigger bill than usual, not enough cash for a fair tip. OK, Visa gets to collect a fee because I suck at planning, that's why I have their card, after all.

[delisen]

6. Yes. Democrats blocked Trump attempts

to allow employers to appropriate Worker tips. He tried and it would have been a gift of untaxable income to owners.

[Mz Pip]

7. It can be easily abused

Take this scenario:

You go to a lawyer for some legal issue. Normally, the fee would be $5000. Instead lawyer suggests you pay $4000 and include a $1000 “tip” in cash.
If lawyer suggests this for all of his clients, he can write off 20% of his income as “tips.”

Project this scenario out to other high paying private sector jobs. It would be impossible to police and I wouldn’t be surprised if SCOTUS would rule it is perfectly legal. Didn’t they already rule “gifts” were legal?

Trump doesn’t suggest anything that doesn’t benefit rich people.

[Darwins_Retriever]

8. Businesses are charged for credit card charges

By the credit card company. The CC company makes its money from the interest paid by the consumer, and surcharges on the businesses. This includes tips that are charged. Some businesses will deduct the charge from the tip paid to the worker. Some companies eat the charge.

But every product you buy includes the cost of these surcharges for the use of a credit card.

[Ms. Toad]

9. Two things -

Credit cards charge fees, so the company may only be giving her the net.

Companies are also require to withhold taxes (FICA, federal, state, City) from income, so the money being withheld is likely going to pay taxes, just like when you are paid directly by the company taxes are withheld.

Far too many people treat tip income as non-reportable, so they want the tip in cash so there is no formal record of it.

[MurrayDelph]

11. The card service's vigorish is often the reason behind those stories

of restaurant owners turning down excessively generous tips to their workers. If the restaurant's policy is to the card fee, the diner's magnanimity could cost the owner big bucks.

[Ms. Toad]

12. It costs the owner nothing,

If there is either a service fee added to everything (including the tip), or if the card fee is deducted from the tip - giving the employee the net. This would make it appear to the employee that the owner swiped some of her tip, if she doesn't know the policy - or is trying to hide income by telling the customer that she won't get all of her tip money if it is put on the card, to encourage a cash tip.

[Polybius]

13. That's common in NY

I worked in a place that took 5% out of every credit card tip. Sounds like not much, but if you have $100 in cc tips for the day, it comes out to $95.

[hvn_nbr_2]

14. The Supreme Cult declared that bribes are actually tips.

If tips aren't taxable, then they can't get you for tax evasion on the bribes you accept.