IRS demanding share of server's tips.....I had no idea.....this is AWFULL.

[Cerridwen]

11. Started in the 80s* under reagan. (update4) See crabby's post #24

Last edited Mon May 18, 2015, 10:11 AM - Edit history (2)

See crabby's post #24 for corrections and sources: http://www.democraticunderground.com/10026676759#post24

I'll leave the old post for the other information I included about taxes and politics in the 80s.

"Tips," also called gratuities (and as such were treated as gifts for "going above and beyond" and were not previously taxed), had been exempt from being reported as income. repubs thought otherwise. I believe it was around the same time-ish, in which congress began defining dependents as "blood/marriage" relationships, credit card interest deductions were removed, and other rob the "poor/workers/middle class" for the benefit of the "ownership" class who will then "trickle down" their largesse unto the unwashed masses really started amping up and going in for the kill.

*maybe late 70s? I'll have to see if I can find anything on the internet from that time frame.

Well, here's an article from cnn:money, 2010, that covers part of what I'm saying though it's light on specifics:

Taxes: What people forget about Reagan

<snip>

Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period.

That legislation -- phased in over three years -- pushed through a 23% across-the-board cut of individual income tax rates. It also called for tax brackets, the standard deduction and personal exemptions to be adjusted for inflation starting in 1984. That would reduce "bracket creep" since the high inflation of the 1970s and early 1980s meant incomes rose very fast, pushing taxpayers into ever higher brackets even though the real value of their income hadn't changed.

<snip>

As a result of the 1981 and 1986 bills, the top income tax rate was slashed from 70% to 28%.

<snip>

The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.

<snip>

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees. (emphasis added)

There is quite a bit more at the article linked.

Link to an article http://www.nber.org/chapters/c5417.pdf from

The National Bureau of Economic Research
The politics of tax reform 1980s
Charles H. Stewart, III