An Education on Tipping. Tip in cash when you can.

[IdaBriggs]

40. What we have here is a failure to communicate. You don't even understand what I am talking about.

If you go HERE: https://secure.ssa.gov/acu/ACU_KBA/main.jsp?URL=/apps8z/ARPI/main.jsp?locale=en&LVL=4

you can pull up an estimate of what you can expect to get from Social Security when you retire.

Social Security is AN ENTITLEMENT because PEOPLE PAY INTO IT. In theory, the more you pay in, the more you get out (with a cap, I think).

This means that people who work "under the table" in addition to NOT paying taxes, ARE NOT paying into Social Security, which means the benefits they will receive at retirement or if they end up on disability will be REDUCED.

So, to recap:

Pay your server in cash / under the table: they get an IMMEDIATE cash benefit. Most will *NOT* claim the additional income on their taxes, and contribute a portion of it to Social Security.

Pay your server with a credit card, and the employer will take out taxes and a portion for Social Security. The taxes, if the server is low income, will be refunded through things like the "Earned Income Tax Credit" and such. The income reported to Social Security will *increase* the amount they are eligible to receive if (heaven forbid) they end up on Social Security Disability, the amount their minor children will receive if (heaven forbid) they die, and the amount they and/or their spouse will receive upon retirement.

I am not talking about "social security is going to run out of money - everybody panic!" I am talking about taking care of tomorrow, even if you are dead broke today.

I don't like the "less than minimum" wages that servers get paid, but I also know the myth that "service workers only do it during college" is exactly that - a myth. It infuriates me that some employers would pass on a portion of the credit card charge to their employees, but I also know "profit margins" for restaurants can be razor thin, with everything from bad weather to changing tastes to increased costs affecting the income of everyone involved in one. Sometimes "spreading the pain" to keep everyone employed may seem like a good idea; it is not my field, so I will do my best not to be too judge-y about it, and I will continue to "tip well" for good service.

But unless you can counter my concerns about the benefits of REPORTABLE INCOME, I will continue to put my tip on the credit card because I bloody well *respect* the people who take care of me, and I think they deserve some long term security.

Your mileage may differ, and as I said, I am NOT a tax expert; these are my thoughts about why I do what I do, which is obviously directly contrary to your advice.