The Problem With No Tax On Tips

[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.