> New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.
My understanding is that this is true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered. The Economist had a couple of nice analyses on this.
Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature?
> true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered
Not just that - they're often timed to expire early into the next administration which, if Democrats win, is an instant "look how the Democrats treat the working folk!" hammer. e.g. "Tax Cuts and Jobs Act" from 2017, expiring at the end of 2025[0].
Tax bills are universally passed through the budget reconciliation process these days to overcome the filibuster (can do a budget with only 51 Senate votes). That process has many restrictions on what tax changes can do to projected revenues outside a certain window: https://www.ey.com/en_us/insights/tax/prospects-for-budget-r....
> Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature?
Oh no.
What you have missed is the incredible end run around the spirit of the reconciliation process that the Republicans did this time around.
So, the did these tricks with the tax in Trump's first term, with tax breaks set to sunset in order to have a revenue-neutral effect over the required ten years.
This time around they needed to extend those breaks, right? So they must had to cut spending or raise other taxes in order to do that and have a revenue-neutral effect, right?
Ha ha, no! They convinced the CBO that the baseline for the reconciliation process this time should be whatever was in effect for the last few years. So those breaks are already baked in and don't need to be counterbalanced. It's a two-step, long-term process for making things permanent through the reconciliation process that otherwise one could not.
Kids of rich people now can exploit this loophole. They can get up to 300k from some fake job and do not pay any taxes on the "tips" part of it. Each month the tips part is going, oh surprise, going to be the maximum allowed by law.
Rich people are more likely to pay accountants to come up with complicated ways to exploit the tax system. If the top 5% had access to this loophole, you’d probably end up with some crazy outcome like 80% of money saved from this deduction goes to the top 5% of earners. And that would make the provision more expensive to include in tax legislation (trading off against other things like the headline tax rate). Since “no tax on tips” was a campaign promise, they probably wanted to keep the promise while setting limits to make it easier to fit into the rest of the bill.
This is the problem when talking about class warfare. We are eating our own. Someone making $300k a year is closer to the median than someone making $5 million a year. Losing ~30% of your spending power since 2008 might not matter if you're a billionaire but for most working professionals it has an impact.
If Democrats win the presidency, they would still probably need cooperation from Republicans to get an extension through Congress, which means that there are no good options for the Dems.
"Would you like to leave a tip for your server?"
"20%."
"And the cook?"
"What?"
"The cook wants in on the no-tax-on-tips so we're asking how much you'd like to tip him. We're also going to ask for the cleaner and the guy who delivered the ingredients earlier this morning."
Yeah, it's optional but if you don't tip everybody loses their minds. I've experienced this once abroad, I was with a group of exchange students that didn't want to pay the tip because students are always broke, and the cashier was mad to the point of being aggressive.
In Brazil we have 10% tip which you can opt out, and we usually do it when there is a problem with the service, but I wouldn't think twice to ask for the tip to be excluded if I was undergoing financial hardships, and I'm sure nobody would bat an eye.
I think it's not just the tip culture that is toxic. I feel like the entire American culture is plagued by toxic masculinity, the gun culture and hyper individuality.
I don’t disagree with your diagnosis of American culture, but the tip thing is just shifting wages from employer to customer. It’s no different from VAT versus sales tax: same result, different math.
Opting not to tip when it is part of the economic transaction is no different from walking out with the silverware; not expressly forbidden, just a breach of social contract.
It's absolutely different because a customer is not legally required to tip, and if a customer decides not to, that is directly impacting a worker's take-home pay.
And walking out with silverware is theft, I genuinely have no idea where you pulled that from as a similar example.
Plenty of customs don’t make logical sense, and plenty of words have dramatically changed meaning over time. Don’t read too much into the word. A “fine” used to mean a voluntary settlement.
You are right, I wasn't really thinking about how customs evolve organically. Outrage kinda blinded me because that experience was such a culture clash that clouded my understanding. Thanks. I mean, I still feel like using the word "tip" for something that is culturally not optional, even though you can opt out, is unnecessarily confusing and hostile, but that's what respecting foreign culture is all about.
Well, shit, if I made it part of the economic transaction, you'd have a point. What you're saying is that the employers are not holding up their end of the transaction.
In America, at least in restaurants, employers are allowed to pay a lower minimum wage to tipped employees. So tips are an essential part of a servers compensation and should not be considered optional.
Let me put it another way for my foreign friends - if you are dining at a restaurant in America with table service, you need to consider (at least) a 15% tip as part of the base cost. If you can't afford that, then you can't afford to eat out, choose a different option.
Then why call it a tip? The cynicism is just unbearable. If it's a tip people are going to have the option of opting out, disregarding any unwritten social norm that contradicts the actual word used.
Because what was once an active decision became a default, what was a default became an expectation, what was an expectation became an effective-requirement.
And lo, norms are made, the ratchet turns, culture solidifies, a new line written to the social contract. And tip-dependent workers have non-optional tipping.
If you really want a logic to follow strictly — any worker class whose wages are depressed by expected tipping should be tipped
I love that we're just like "so FYI we decided this particular class of worker is okay to pay less than a living wage but to compensate if they do really good at their job, we're going to make it a social norm that people pay more than their bill costs and they keep the difference."
Wouldn't it make far more sense to just pay them a living wage and charge what that costs and be done? It's genuinely the only part of eating out that annoys me is it ends with a math quiz.
> In America, at least in restaurants, employers are allowed to pay a lower minimum wage to tipped employees. So tips are an essential part of a servers compensation and should not be considered optional.
This actually varies state by state. In Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington the minimum wage does not change tipped vs non-tipped. Also in other states if the pay after tips do not meet the state minimum wage the employer is required to make up this difference.
If you actually look at the data tipped employees make significantly more vs median income in countries with tipping than without.
> If you can't afford that, then you can't afford to eat out, choose a different option.
I think this works if we're talking about a full restaurant, If we're talking about a mostly empty restaurant then even a 5% tip is money that the server would have not otherwise had, pretty certain they'd choose more money over less.
My understanding is if an employee who gets paid largely in tips isnt making more than min wage, that employee is almost always let go or quits. Employment layers dont love trying to prove a case that is pretty unlikely to be provable.
They can always find a reason, such as "so and so customer complained about your level of service and I can't have any complaints as a business owner" which on its face is a legitimate reason to fire someone.
This comment is very disconnected from the reality of service industry wage theft. Employment lawyers rarely bother with a case where the potential payout is a few thousand dollars.
In theory the federal or state department of labor could do something without the worker needing a lawyer. The federal DoL is useless in such cases and most state DoLs don't seem to do much either.
I don't understand how it's the customer's fault if managers are blatantly stealing wages. That sounds like someone else's problem to solve. If servers make it public, I'll stop going to that place, but preemptively tipping to avoid illegal labor practices feels like a bad solution.
> you need to consider (at least) a 15% tip as part of the base cost
No, I don't need to do anything. Restaurants are free to charge a service fee and state that plainly on the menu, as many already do. Otherwise it's optional and I will treat it as such.
Nah. 10% is standard, 15% is they did something good besides what's expected, 20% is amazing.
But I personally have chosen a different option because it's just exploitive all the way around. The business trying to exploit it's employees, the employees exploiting customers (10% being pushed up to 15%).
Explain to me how a society with minimal well care, where people would rather die of a heart attack than get taken to a hospital, where you need to save your entire life to afford a mediocre education for your children... How is that a collectivist society?
In Italy tips are never required as are a part of what you pay for. You leave a tip for outstanding service if you want, but it’s neither mandated nor customary.
Tipping has a powerful advantage: it aligns the incentives of customers and servers almost perfectly. Because tips aren’t capped, waiters are motivated to go above and beyond to satisfy each guest. Without tipping, the server’s motivation often drops to providing only adequate service—more in line with the restaurant’s interests than with each individual diner’s needs.
You can see this difference in customer experience worldwide. Nowhere delivers consistently attentive service quite like the US. By contrast, many European countries, especially those where tipping is uncommon (such as the Netherlands), often provide service that feels efficient but impersonal.
That might make sense... until they ask you to tip before you receive the service! When I order a coffee at a small shop, and the card terminal asks me to select a tip (displaying the default choice of 20% centered and in bold), how am I supposed to know whether the coffee will be good or not? As a regular customer, sure, you'll have an idea of what the general level of service at this place is like. But the expectation these days is to always tip, even if I've never been there before and I have no way of accurately judging the quality.
I never tip before receiving the service. Always hit zero. It feels a bit weird to begin with but you get used to it and i've not been treated any differently. A tip is generally not required for coffee or to-go/counter service.
That's anectdotal.
There is literally zero alignment or correlation between tipping and good service.
You want to have a stress free experience the waiters tries to upsell you at every corner.
If you mistake upselling for attention then you're part of the tipping complex already.
Good service comes from good training and experience not the assumed money left over in your wallet.
That's the businesses goal of not leaving any money on the table. So the alignment is between the business owner and the employee if anything, not between employee and customer.
I would make an exception for bars, but that's about it.
>That's anectdotal. There is literally zero alignment or correlation between tipping and good service.
The correlation is simple. The better the perceived service from the customer, the bigger the tip is.
>You want to have a stress free experience the waiters tries to upsell you at every corner.
In the vast majority of restaurants the server has little interest in upselling you. The exception is, perhaps, at a place with an expensive wine list (and regardless of tipping, businesses will be looking to upsell that wine list).
>Good service comes from good training and experience not the assumed money left over in your wallet.
Speaking as someone with industry experience, this is honestly just funny to read.
Training? For a server? Lol!
These are by and large scrappy people (and I say this lovingly). Lots of cursing, dubious substances, people working hella long hours in other jobs, people who are just planning on working for a few weeks and then leaving, etc. Yet when a big table comes in, they button up and act perfectly, despite cursing about the customers in the back, and the incentive is not "up selling" (servers care about seat count and nothing else - that's how the hierarchy of the seating pecking order is structured) it's about tip money.
Good service doesn't come from experience either. The newest servers will basically give the best service (they're nice to everyone), while often the most experienced servers are the most jaded and cranky. It's a rough job to be part of long term and it breaks you down a bit.
Also, regulars who tip well are truly appreciated by the service staff, and the staff really does go out of their way to make sure they get good service. This is because of the steady, predictable income stream. I don't know what to tell you other than, yes, the tip money absolutely does play a large part in the customer experience, and there is a correlation.
> Nowhere delivers consistently attentive service quite like the US.
I have found this to be true in pretty much all interactions (on average), regardless of whether the person is on a tipped wage.
Americans value salesmanship and customer service in ways that few other countries I've been to do. They market better, they sell better, they make customers feel better, in pretty much all types of businesses.
Source: someone who's lived in three major US metropolitan areas, and two in the EU.
Here the other thing - sometimes I don't want extra service, I just want my food and that's it. But the waiter will try really hard to impress me with something I don't want.
Then I'm the bad guy for refusing to pay for something I didn't want in the first place.
> Because tips aren’t capped, waiters are motivated to go above and beyond to satisfy each guest. Without tipping, the server’s motivation often drops to providing only adequate service—more in line with the restaurant’s interests than with each individual diner’s needs.
Do people tip their accountants? Their nurses and doctors? Their dentist? Their mechanic? The cashier at the grocery store? The clerk at the shoe store who fetches the shoe in the size/colour I want?
Perhaps people should just do their jobs properly because that is what they're paid to do. And if they're not doing their jobs such that the restaurant/business suffers in its reputable they get fired and replaced by someone who will. (Kind of like how I have to do the job I'm paid to in IT or the company will act accordingly if I do not.)
It's getting harder to get the drivers to accept rides in some situations. Recently, I watched some Uber driver accept my ride and then drag their heels to pick me up in the hope that I would cancel. They didn't like my destination.
This reminds me of the old Soviet union where the rates were fixed by some central committee. In order to get a cab to pick you up, you would hold up fingers that represented how much extra you would tip. The more fingers, the more likely the drivers would actually stop.
What you’re describing is how it _should_ work. Instead every server feels entitled to 20% regardless of how bad their service is and it is frequently atrocious.
Besides, I’d rather have efficient and impersonal than (at best) fake nice.
Living in rural Spain service is chill. Am used to it by now. Went to an upmarket restaurant in France other day and it took me ages to realise the waiter was vibing me the whole meal for a tip. Such a weird transactional space. Person literally smiling and being agreeable for money. Insane.
I personally _hate_ American service with passion.
I prefer to be left alone most of the time in restaurants or not being talked to like the best friend I haven’t seen from the high school.
I also have an expectation that the waiter is not in a desperate position to rely on a tip for their living and is fairly compensated by their base salary.
To be fair, tipping the cook makes more sense to me than the waiter. I come to a restaurant for the food, I don't particularly care about the service beyond a certain baseline. It never makes sense to me that waiters can earn more with tips than kitchen staff.
Yes it seems totally arbitrary. When I first visited the US I paid for our group, and didn't tip the waiter because he got our order wrong, and was met with aghast faces. I didn't realise you're supposed to tip EVEN when the service is bad!
The employer is shifting the responsibility of wages to the customer (you). It is customary in business to pay a wage even if an employee makes a mistake. The tipout structure of most restaurants, where the server tips out the kitchen and support staff, also collects a percentage of all *sales* from the server's tips, so not tipping results in a server paying your tipout from their tips just for the privilege of serving you, hence the agast faces.
Tipping should be illegal to substitute for pay. Majority-tipped restaurants are almost always predatory and take advantage of both customers and employees in order to further enrich the owners.
I don't think that's true in the vast majority of establishments? Tip pooling usually means that the front of the house staff pool their tips. Not that they share with the entire restaurant.
Yeah, I don't know anything about the majority of establishments.
My single reference is the Norwegian upscale restaurant Theatercafeen, which introduced tip pooling across waiters and kitchen. It was highly contentious when introduced by the restaurant: The waiters took the case to the courts, and it went all the way to the supreme court of Norway [1], where it was decided that the employer could decide rules for tip-sharing.
That’s a very engineering viewpoint. But much of the world values the whole package, including clean and neatly set tables and place settings, advice on the menu, timing of courses, QA of prep and fixing issues without customer intervention, help with any mishaps like spilled drinks or dropped silverware, boxing of food to go, etc.
A utilitarian only interested in pure food quality is much better off cooking at home. You can do better at a quarter the price.
Food/software is only about 25% of the cost and value in these businesses, though perceptions on value differ of course.
In the US, the cook and busboys and other support staff normally also receive tips as part of the "tipping out" system where the servers split part of their tips. It is voluntary but not really - if you, as a server, don't tip out your tables start not getting their food as fast and the table isn't turned as fast.
I have a question for the American's in the audience here.
There's always this narrative about tipping allowing for exceptional service and I wanted to know what meta advantages or options have you been given or seen as a result of this?
I'm reminded by Charlie Sheen's character in two and a half men consistently tipping the pizza delivery driver who brings him a champagne bottle with his pizza.
As a comparison elsewhere, I've had French wait staff bring me bread at the table whenever I visit Paris and even if the restaurant is out they source it from nearby restaurants unprompted with no expectation of a tip even though I would perceive that as being above and beyond service.
I'm trying to understand if we're all on the same page about great and even exceptional service :)
As an European (Romanian, more precisely) who has visited the USA, I would say that servers there were much more patient and attentive than servers I'm used to both from my own country, and from various European vacations. I still remember a young waitress who repeated all of the options on the menu literally 5 times going around a table of 15 people.
However, I'm not at all convinced this is as tied to tipping as people claim. My own country has a very clear and old tipping culture (though 10% is the more common "target" tip for food service), and yet service here is often terrible, with bored and annoyed waiters. I think it's much more of a cultural norm than any kind of strong economic incentives.
I find the main difference between the US and Europe to be cluelessness and very different views about what good service might look like. My conclusion is that good service comes from management valuing good service and training (or firing) their staff accordingly.
The most common difference: restaurant wait staff aggressively removing plates as soon as or before you are done with them. While in Europe that obviously would be rushed and seen as overly aggressive and a hint that it's time to get the hell out to make space for other dinners. Super rude in Europe, considered attentive service in the US.
Striking experience: At an allegedly "five star" resort in the US, some wait staff being very loud and chummy with the guests to the point of disturbing the guests, and other guests, and neglecting other tables! Inconceivable in Europe - reserved for top management or owners. And failures to pay attention left and right - by all the staff everywhere. Clearly blameable on management defining the wrong parameters as objectives to their staff.
Tipping in the US is entirely hit or miss: some staff will remember past tipping, but only some. Some staff make a visible effort at service (before tipping), but only some. Etc.
But to be fair, there was a time when service in Paris got so bad and rude that the waiters corporation ran ad campaigns asking them to cut it out and do better. French service still has a bad reputation (of rudeness and scams). And there, it's very much NOT that waiters don't know what to do and not do. They know.
I would see working out "out of bread" with the neighbors as normal when the restaurant is not super busy, and "above and beyond" at rush hours. But then in France, running out of bread before very late in rush hours would be a clear management failure.
Ironically, as an American the only time in my life when I had a waiter effectively ask us (a couple) to hurry up so other diners could sit, was at a Michelin starred restaurant in Naples, Italy. We hadn't even been there an hour, weren't even done eating yet. Perplexes me to this day.
I'm not a fan of tipping in general, but as an American who has spent a lot of time in Europe, my experience is that the level of service in American restaurants is quite a bit higher than in European ones on average. That's not to say that in Europe it's bad service per se, and in certain ways I actually prefer it in Europe where the server isn't constantly "checking in" on me while I'm trying to have dinner.
I can't speak for the rest of Europe but, as a Brit, I find this kind of overbearing and inauthentic type of service somewhere between cringe and outright annoying. Especially when it's accompanied by a lack of competency, for example missing items or not doing what they said they'd do.
A lot of people feel this way, but as someone with experience here, it's also not just about trying to be overbearing.
Remember, servers are dealing with the average American. A decent portion of the people that come in are extremely demanding. /Three rounds of sauce on the side in different configurations... Can I have the sauce from that dish on the other table on the side of my dish? Oh it's part of the cooking process? Can you ask the chef if he can put it in a little ramekin? Oh it's a sickly sweet glaze that needs to be cooked? I think I'll try a little bit of it anyway. Ewww this is disgusting take this back!
Dealing with this day in and day out will default you to that service state after a while, especially because the "average working class Americans" often tip the best.
Every server knows screwing up the actual food nukes their tip (and it often does). If they're working in that context and still messing that up, well, they probably can't be helped.
> That's not to say that in Europe it's bad service per se, and in certain ways I actually prefer it in Europe where the server isn't constantly "checking in" on me while I'm trying to have dinner.
I want them to check in to ensure that the order was (a) correct, and (b) properly cooked.
There may be instances in which you drop some cutlery or need an extra napkin, and a quick check-in could be useful. You could also flag them down with a raised hand or eye contact. A busser could achieve the same results too (also refilling water glasses).
I honestly think it leads to much worse service. The waiters end up calculating every action they make to a money value, leading to every interaction feeling transactional. Creeps me out.
I don't like the idea of even more expectations for tips, since we're already tip-fatigued. Despite that, I'd rather have less rules and taxes and have them actually enforced than have a situation where people pocket the cash portion of their tips untaxed anyway, which only punishes honest people.
It's pernicious. I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server (in the places I've been to, it is). Tipping needs to die and it's frustrating to see it starting to proliferate in some European countries.
With a small amount of sadness, this is the conclusion I'm starting to end up with. Yes I think waitresses and service workers should make more money. But tipping in the US has become opaque, expanding everywhere, and the expectations around tipping seem to be getting ratcheted up constantly. A business is not viable if customers have to pay your employees separately. I'm close to hitting the nuclear button and just defaulting to zero.
My bright line rule is that I won't tip before service is rendered. If I'm asked before, I can't judge the service, and therefore making a tip decision is impossible.
Let's see... two tiny countries that specialize in finance, a city-state that is the historic trade hub for the region, another that is the historic gambling hub for the region, and a low-population country that won the oil lottery and has been smart enough not to let its residents get high on their own supply, thus avoiding the worst of "the resource curse."
I was in Japan last month, tipped 4 times, once it ended up awkward with the waiter insisting me to take it back, the other 3 times they accepted it gladly and thanked.
Yes this is so cringe, but it makes me kind of laugh. Of all the things the Western world historically imposed on Asia, it makes me laugh this is what made me feel is most cringeworthy as of recent.
Please keep your tip customs out of our culture. Next time just say thank you several times to show you appreciate them.
I don't know if that's true for Japan. The only non-Japanese folks I knew, over there, were Chinese, and they weren't exactly the types of folks that waited tables.
In recent years Japan's immigrant population increased by 500 to 1000 people *every single day*.
Many of them end up in hospitality, especially in touristic places, due to different reasons, but very importantly, immigrants from south Asia generally speak English fluently, something Japanese people rarely do.
I've seen plenty of "japanese" restaurants in Shinjuku where not a single member of the staff was japanese.
Another place where you're gonna see plenty of immigrants are all convenience stores.
> I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server
This may be the case some of the time, but from what I’ve seen and heard…
During COVID, everyone put out the tip jar. It turns out that some folks are willing to give in spots that are not “traditional” tipping situations.
Some folks just have extra money, and they are happy to share their wealth with others. This is doubly true in hard times.
Tips are one way to do that, and some folks do that with extra generosity.
I will also add that people seem to be more than happy to tip/give extremely generously to folks who “make their day”. Maybe it’s a great ride share driver, or a great massage therapist, or an online streamer, or whatever. Some people seem to be more than willing to tip folks who bring them joy.
All that said, if that’s not your style, just click skip and move on. Most people understand and won’t judge.
There are a handful of entitled people who will try to guilt people into typing in non-traditional tipping spots. Just don’t go back to those places if at all possible — those people suck.
The most frustrating thing has been the tip prompt that happens before service has been rendered. A tip is based on service. If you haven't received the service yet, the fuck is the tip meant to reflect? That you succeeded at breathing?
I have a diametrically opposed take. I prefer tipping before.
It's my way of giving someone a little appreciation because they're (typically) doing a job I wouldn't want to do myself.
It's got virtually nothing to do with the quality of service I get. I always tip the same amount even when service is bad. There have only been maybe 3 exceptions in my nearly 3 decades of adult life.
I'm fortunate to be able to afford a little bit of generosity for service people, so I do it.
Edit: I should add that, in places where there's a customary tipping practice (eg: US restaurants), I tip above the customary amount no questions asked. The "generosity" is the amount above customary.
The problem stems less from how it might have originated and more from what it results in.
Multiple times I've been travelling for dinner with coworkers and someone notes "oh, tip is already included here" (be it the group size, the way the place works normally, or whatever reason) and then half the table starts redoing the receipt because they were tricked into it. This example highlights it's not always about intent, work already has a set policy of how to tip (i.e. no generosity or etc involved), people are just getting plain tricked into doing something else instead. Regardless - it's successful in the growth of tips, so it spreads.
Similarly, "just click skip and move on" puts the friction in the wrong direction - especially if you're not alone. It's great that it can apply a lot of the time, but the problem is it has friction, sometimes strong, in certain scenarios - again, this friction is only weighted towards the growth of tips.
Lastly, the vast majority of people have some level of desire to be fair, even if they don't want to be generous. Any uncertainty which can be created in the tipping process ("am I supposed to tip here?", "is the tip in the service charge, if so how much goes to the person/how much were they expecting to get in total?", "is the recommended tip on the receipt more than I expected", and so on) tends to push people to tip more than their generosity alone would have inclined, and it's really quite unfair to say the solution is to just click skip and hope all will understand each time.
Unfortunately, there is pretty much nothing pushing in the opposite direction. Your options as an individual, or even sizable portion of society, are to shit on the wait staff's income about it in hopes they complain enough that management gives them a better salary (that'd take quite the movement). Everything about this side has the exact opposite incentive pressures as the above, and so whether particularly generous folks are a factor or not... there's really nothing that's going to get done about it for the typical person.
Maybe we can start some place in the middle of "being able to walk into a place and understand what the cost will be up front", such as including tax in the base prices of things, and it'll open more doors about tipping for the same consideration. Until then, we all are stuck with dealing with it.
"Your options as an individual, or even sizable portion of society, are to shit on the wait staff's income"
My primarily option is to multiply the estimated cost of going to the restaurant by 1.3 (tip+tax) and make my decision about going there based on that figure, not on published menu prices.
That's a good estimate for an individual visit as of today but is precisely the kind of thing that which has resulted in "normal" tips going from +.1 to +.15 to +.2 as the years go on (erring too low has more friction than erring too high, and if something else raises the amount traditionally tipped somewhere then "normal" for this will tend to adjust upwards in a large group).
Yeah, this is going to incentivize businesses to try and make as much of their employees' pay come from tips, which means consumers will be expected to pay more tips, which is the opposite direction I want it to go.
Bluetti hit the "are you actually fucking serious?" level for me with the tips. They ask you for a % tip when you order online from them. No employee contact, no consultation. I just added a $2k item to the basket, tried to pay and got an invitation to tip extra.
I think one aspect that is understated: "No Tax on Tips" is only a deduction for the purposes of federal income tax. W-2 workers still owe FICA and other payroll taxes on such income, and similarly self-employed workers would still owe self-employment tax.
To me, a more appropriate name is "Some taxes on tips".
And most of their tax is already at the state level or FICA, so it's more like, "most taxes on tips, unless you make decent money, then you bet a break."
"No Tax On Tips" is so stupidly regressive and yet another addition to the complex tax law. Somehow we decided a waiter making 100k with tips needs more help than a stock worker at Walmart.
It isn't "no tax on tips" that's regressive, it's tips themselves. If tips are a gift, then they should be taxed as gifts are taxed. End tips and raise wages, and the taxes cease to be confusing or controversial.
For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children.* Why do they get to do this?
Or to take it to absurdity, why aren't my donations to charities taxed? What's the reason for the carveout? Should I instead donate earmarked cash to a charity that provides assistance to underpaid waitstaff?
For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children. Why do they get to do this?
For the same reason we have a generous gift tax exemption applicable to any gift from anyone to anyone: If you’re not receiving something of monetary value in return, what you’re providing isn’t “income” in the sense Congress has built income tax policy to capture.
Well, this year I suppose it will be $1,583.33. That's just the gift tax exclusion ($19k this year) at work. I don't really see a problem with it. People should be able to give money to family members without penalty.
> End tips and raise wages, and the taxes cease to be confusing or controversial.
Some businesses have tried this, but often it doesn't work out. To make this financially feasible, it would require action at the federal and state levels to 1) eliminate different tipped vs. regular tax rates (some places have done this already), 2) and modify how payroll taxes work to even things out a bit. It sounds like "oh, no problem we'll just raise prices by 20% to cover the extra salaries". But no, that doesn't work, because businesses and individuals are responsible for payroll tax on non-tipped salaries.
And there's a collective action problem at play: take two identical restaurants. One follows the now-standard model of accepting tips, and ~20% is customary. Their identical competitor won't accept tips, pays their staff better, and charges 20% more for their food. Fun outcome: people get sticker shock at the second place and go to the first place instead, even though in the end they pay exactly the same amount. Human psychology is dumb, and restaurants know this, so they won't do this unless all their competitors are also required to do it. (This is also why in the US prices are advertised tax-excluded; pricing that includes tax is viewed as more expensive, even if the final charge is the same.)
That survey is stupid in this context, as it include everyone 18+ as an ‘adult child’, which includes a lot of college students. There’s nothing malicious about supporting your kid in college, nor would it make any sense to tax that.
Nothing wrong with giving money to your kids in general. That income has already been taxed. If they were paying the kids for pretend work and taking a deduction for the higher-income parents, that'd be different.
> As you might expect, Generation Z adults (ages 18-28) receive more financial support from their parents than their Millennial counterparts (ages 29-44),
I mean, yeah, something like a third the former are college students! What a trash fire of an article.
"no tax on tips" was a pandering move to the mostly financially-illiterate populace that still don't understand progressive tax systems. Singling out certain types of income makes no sense and is very unfair. I wouldn't be surprised if this actually ends up resulting in less tip income over the long term due to people going "wait my income is taxed but theirs isn't, why should I tip as much?"
Non-tip workers won't remember (or even notice) the phase-out. The damage is done and I agree it will incentivise people to tip less even after the phase-out.
Extending the 2017 tax policies, specifically continuing the capping of SALT deductions, leads to higher taxes for high income earners. That deduction was worth $100K to a $1M/year income in a 10% State income tax state earner. Even more when you add in property taxes.
If they had not been extended the taxes for those high earners would have dropped for 2025 and beyond.
The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
Yeah this argument is so silly: "the top 1% pay 60% of income tax" oh okay, so as they get closer and closer to escape velocity from the rest of us, that number will climb to 1% paying 70%, then 80%, then 90%, so your argument to tax them gets weaker while the functional need to tax them gets stronger.
> The Federal Insurance Contributions Act (FICA /ˈfaɪkə/) is a United States federal payroll (or employment) tax payable by both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.
7.65% of your check until you hit the cap. Employer pays a similar amount.
Additionally, removing the cap on FICA contributions would likely push Social Security back into long-term solvency, but that would be far too much of a burden on the top 1% of wage earners so it’ll never happen.
It wouldn’t _have_ to, that’s a political decision not a mathematical requirement.
But, even if you did it would still help tremendously and possibly still be sufficient. There’s diminishing returns where lower income people get a higher percentage of their income as a social security benefit. As long as that policy is maintained the ultra high wage earners would be contributing far in excess of the benefit they get paid back out
Currently, the amount you put in social security over the years determines how much you get when you retire. Why would anyone support a system that is suppose to be to help you in retirement where you are paying an unlimited amount into a fund and then capping how much you get out?
Because they likely already have more than enough and have been blessed by society/civilization as a top earner who will enjoy a comfortable retirement without any social security, and they’ll be better off if other people that didn’t earn and save as much are able to retire without being destitute in old age.
That perspective could be someone who is willing to say “You know what, I already have enough, let’s make sure the floor is raised for everyone.” Someone who believes more in individualism would probably disagree with that perspective.
You think someone making just over $175K (the current social security taxable maximum amount) is able to save enough to ensure a comfortable retirement?
> Currently, the amount you put in social security over the years determines how much you get when you retire.
Currently, there's also a maximum amount of benefits. That could easily stay.
> Why would anyone support a system that is suppose to be to help you in retirement where you are paying an unlimited amount into a fund and then capping how much you get out?
Same reason people pay school taxes if they don't have kids. Because we live in a society, and we tax people to fund things like this.
So you want to raise the marginal tax rate by 12.4% (employee + employer) without the person getting any benefit?
> Same reason people pay school taxes if they don't have kids. Because we live in a society, and we tax people to fund things like this.
And educated children, police, roads, etc benefit society and we were all at one point kids who could take advantage of public education, I don’t even have a problem paying more in taxes for universal healthcare that will reduce my + employer expenses on my healthcare.
But paying an extra 12.4% for what was suppose to be a retirement account that I don’t get any benefit from and reduces the amount I can save toward my own retirement is a bridge too far. Since 2018, I’ve been slightly above the increasing social security maximum. So it’s not that I’m one of the 1%.
It very much is. The more you put in the more you get out. From a financial accounting standpoint, the money you put in goes in a “trust fund” that is constantly borrowed against. It was never suppose to be that way. Social Security taxes is not allocated for current retirees. It just goes in the general budget.
It is not a personal account where what you put in is yours. You don't have a balance that runs down to zero if you live too long.
"The more you put in the more you get out" is only because that is how your benefit is computed. It is not because there is a certain amount of your money somewhere.
Related: your benefit is calculated on your 35 highest income years, not the total sum of your contributions. [1]
Other thing worth noting: the AARP page about SS myths that literally says: "Myth #7: Social Security is like a retirement savings account." [2]
The trust funds for social security are used to pay for everyone's current benefits and the rest is invested [3]. The fact that it's supposed to remain solvent still doesn't make it a retirement account.
Yes: it feels like a retirement account because you pay in now and (hopefully) cash out later. But that is only a feeling.
And finally, I started my GP comment with "nit" as one of my first three words because I understand the distinction is somewhat hair-splitty, but it is still real and relevant to how we think about it.
> By law, some payroll taxes are the responsibility of the employee and others fall on the employer, but almost all economists agree that the true economic incidence of a payroll tax is unaffected by this distinction, and falls largely or entirely on workers in the form of lower wages.
Who is charged the tax and who pays it are different things.
In some states, the stores are the ones that owe the "sales" tax (which in these states are actually excise taxes that the business can pass through to the customer).
The "tax" the customer pays in those states is the "pass thru" charge. To make things fun, Hawaii imposes the excise tax (on the business) recursively on any tax charges passed thru to the customer.
this is roughly equivalent to saying "we don't pay import tariffs, importers do".
it may be technically correct, but it still impacts individual costs/income at pretty much exactly the same amount, because the costs are just passed down the chain.
> That deduction was worth $100K to a $1M/year income in a 10% State income tax state earner.
What? Income deductions are only worth the marginal tax rate on that income -- ~40% on $100k of income deducted is worth ~$40k. (With the $10k SALT cap, he can still deduct $10k, worth about $4k.) The top bracket being reduced from 40% to 37%, and starting at a higher income threshold, likely saved the same high earner more than $36k.
You’re over mathing here - GP is simply saying that if someone lives in a 10% income tax state and makes 1m, they can deduct $100k from their income (presumably because it was never really theirs).
They specifically make the claim that the TCJA is a net negative for this hypothetical $1M earner in a 10% income tax state, and I don't think that's true.
> The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
This tells us nothing unless we know how their relative income shares. If the bottom 50% earns only 20% of all income (just an example) this is quite fair. If they earn 60%, it's unfair.
The number of people who just trot out this statistic without context is quite tiresome.
And of course everyone pays sales tax, property tax (even if they're a renter), payroll tax and so on.
What do you think should happen to you if your house is more valuable in a year than the year before, even if you aren't selling or otherwise leaving that house?
But do they do income-like taxes on the added value? This seems to be what people (GGP) are wanting from the increase in stock values, ie, unrealized capital gains.. which is frankly terrifying.
Well, if you want to tax the stocks that the wealthy own.. why wouldn't you want to tax the stocks that many regular people own? Where do you draw the line between the two?
Wealthy people's stock in retirement accounts would also not be taxed. This can be considerable: Peter Thiel's Facebook investment was made in an IRA.
I imagine there'd be some net worth number, excluding retirement accounts, that policy wonks could work up. You draw the line between "wealthy" and "regular" there. Or, more likely, several lines because there would be wealth brackets similar to income brackets. Without that it would be a regressive tax.
I don't disagree with that. But it's a much bigger discussion. Abolishing all property taxes means city and county finances need fundamental re-working.
Capital gains receive favorable treatment under US tax code but are also a realized gain by definition. That is you actually have to sell the asset and are taxed based on any profit earned.
An increase in the estimates value of your real estate holdings does not trigger a capital gain. Your municipality, however, may use it as an excuse to increase their assessment of the value of your property, which is used to calculate the tax they charge.
His net worth increased due to asset appreciation. Nobody physically transferred him any money and it can fall back down tomorrow. Should he get a refund if Oracle stock tanks?
He pays less next year because Oracle stock is worth less. Just like property taxes on people's houses.
The math on taxing unrealized gains or losses doesn't work out for the reasons you pointed out. Property taxes, on the other hand, have been working for a long time.
That doesn't answer the question I posed. First off it conflates "high-earning" with "wealthy". Plenty of early career doctors are high earners but have a negative net worth. They pay more taxes than someone with millions in net worth but lower "income".
Secondly, just because the median earner pays a 2% average income tax rate while the top 1% pays on average 21% doesn't tell us anything about its fairness. It ignores income share.
> a pandering move to the mostly financially-illiterate populace
I immediately assumed it was a clear overture to people who are very financially literate and who were expecting within minutes an email from their tax lawyer to explain how payment for their activity happen to quality for a very loose definition of tips. At least the part that wasn’t already tax-free thanks to international montages, blind trusts and creative reporting.
> Singling out certain types of income makes no sense
Actually it makes sense based on what income can be reliably taxed. Impossible to verify how much that person actually tipped, so better write $0 on the tax form. As someone else wrote, that only punishes honest people.
People already vastly underreport their tips. This just codifies it in to law. I’m not saying it’s right but I also doubt it’s hitting the IRS’s coffers especially hard.
Logically, it would make sense to me to make it dependent on how much of your income comes from tips. It doesn’t really make sense that wait staff shouldn’t pay taxes on their tips, as it’s basically just their income but paid by third parties. When I was doing wedding photography and someone gave me a tip on top of my normal fee, that feels more like a gift than my income. It was fairly rare and was nowhere near the majority of my income. That, logically, shouldn’t be tipped as long as other gifts aren’t.
> The act also provides that tips do not qualify for the deduction if they are received “in the course of certain specified trades or businesses — including the fields of health, performing arts, and athletics,”
So buskers have to declare their tips, but servers don't?
I used to try practicing no tips. I live in a state with no different tipping wage. To me that makes the argument of "they get paid nothing" impotent. But, culturally, people will perceive you as a prick for not tipping at restaurants. It's not fair and I don't like it but, that is the culture that has spread from tipping wage states.
Now that I have given up on that battle I do scale my tip for how good the service is.
All employees receive minimum wage regardless of whether they receive tips. Tips are not there to backfill the required wages nor can they be used for that. So this isn't the $2.13 min wage that must get to $7.25 when tips are added in.
In my area, the min wage is somewhere around $15/hr. Anything less than 20% tip on top of that $15/hr is considered stingy. The restaurants that do a service charge instead of tipping add 22% and sometimes a 4% fee to pay for employee health insurance.
Anymore, we really only dine out for special occasions or a monthly visit to our favorite spot.
As a statement of how things should be, I agree. But it is not true in most states. When servers are paid the same as the minimum wage there is no separate tipped wage. The words you are looking for in a particular state's labor laws are "tipped wage" or "tip credit". There are many states where the employer can count the expected tips as part of the wage they pay. So, they pay the employee something like $2.13.
If tipped employees are just earning that standard minimum wage and nobody tips them, then they just get the minimum wage. I can see situations where they'd be pretty mad -- there are a lot of restaurants where tipped employees make more than the standard minimum wage.
All of that said, I believe that tipping is horseshit and should go away. But I can't protest it by refusing to tip unless I want to punish the wrong people.
> No nonsense on dividing tips between people that I did not interact with
It is true that in some contexts, a good waiter elevates the experience. But in most restaurants the waiter adds nothing to my experience. If anything they're a hindrance. So I'm very much in favor of forced tip sharing with the people who actually made the food I enjoyed.
Absolutely. As a brit used to waiters and waitresses in the UK and Europe generally leaving me alone until I ask for something, I find the constant fawning interruptions from American service staff cringe-inducing.
A refreshing aspect of US culture is the lack of a historical class system and associated cultural baggage that we have in the UK. So I find it so strange that once you step into a restaurant you are forced into this weird servant/master cosplay where you dictate the server's livelihood based on how you happen to be feeling that day and the resulting whim of your pen writing on the tip line.
Japanese people are offended, so don’t do it there. People in other places tend to be flattered, so you can, occasionally. But the idea that you should pay your employees a living wage has been a well established principle since the 19th century.
I've found that when I go to restaurants outside the U.S. without speaking their native tongue they often ask where I'm from. Answering that you are from the U.S. will make the servers overly friendly and then they will ask for a tip.
If it's free for all users, and you don't provide any benefit to those "tipping", it's already an untaxed gift in the US, if no individual gifts more than $19,000, and even then, the gift giver would pay any taxes. Tips require a customer relationship to exist.
In what bizzaro world would a far left party want to support the weird American fixation on relying on tipping to ensure a worker makes a decent living?
A actual far left policy would be a collectivised or cooperative workplaces that don't rely on tips to subsidies salaries.
Well, it's a very populist move and the extremes of either party will go down that road to get votes. Far right parties are generally for social programs as long as the wrong people don't get them.
But it also expands the idea that the customer/buyer has financial power over the server by encouraging a tipping culture.
Donald Trump and his sons have repeatedly said that don't pay on contracts when they view the work is poorly done or insufficient, in response to claims of non-payment.
Encouraging tipping makes such "payment discretion" easier.
Two decades back, if you told me someone wanted to dramatically raise tariffs, and have the government take a stake in Intel, I'd have assumed this was someone who labeled themselves a Socialist.
After all, the government taking ownership of industries matches common definitions of Socialism.
Even if that were true (it isn't) that's like saying the D in DPRK stands for "Democratic", but using a word doesn't make it true. North Korea is not democratic.
Hell, even back in 1931, people knew the Nazi party was using false branding. You can see it with this anti-Hitler editorial cartoon [0], where Hitler is changing the emphasis of the party-name to schmooze up to different audiences.
Or remember that Night of the Long Knives [1] in 1934, where the Nazis murdered the "socialists."
When the public institutions fail people seek authoritarianism to actually get things done.
While doing so in an awful manner, the current administration is definitely getting things done.
I primarily blame Democrats for the current situation for they have been doing just an awful job of getting anything done or standing up to opposition, they are ineffective cowards and invited the current situation with their incompetence.
> I primarily blame Democrats for the current situation for they have been doing just an awful job of getting anything done or standing up to opposition, they are ineffective cowards and invited the current situation with their incompetence.
I agree with you that Democrats have been ineffective in opposing Republican policies but I think you've come to the wrong conclusion. When someone gets robbed I don't primarily blame them for being ineffective at securing their home, I blame the person who robbed them. Why wouldn't you primarily blame Republicans for pushing bad policies instead of Democrats for being bad at blocking them?
Because we are talking about a nation and a political party covering half the population and not an individual victim of a crime the "don't blame the victim" morality does not apply.
When government is doing a terrible job it loses the consent of the people and gets overthrown, usually by monsters. This is the problem with Democrats, they think they should continue to win, that they deserve to continue to win regardless of how they perform. Because they're right it is morally correct for them to continue winning.
THAT'S NOT HOW THE WORLD WORKS.
It is historically objectively true that governments failing to address the concerns of their people are replaced, usually by authoritarian autocrats. It's a pretty straightforward mechanism.
Democratic leaders in the party corrupted the process to put Hillary Clinton and Joe Biden on the presidential ticket. Democratic leaders in Congress failed to show any leadership, failed to address any problems, failed to stand up or take any sort of action that addressed meaningful problems in this country.
They created the environment for the right to fall off a cliff into extremism.
Instead of defending democracy they sat back and watched.
You've got hundreds of millions of people in this country, extremists are always going to exist. You can't pretend that they don't exist or hope and moralize and blame them for existing when their ideas get popular.
The ideas of the extreme right got popular because the ideas of the center and the left failed to convince enough people.
When my castle falls I'm not blaming the invading army, there's always going to be a new one testing my defenses. I'm blaming the castle guards.
This isn't the case of a poor defenseless victim of a senseless crime. This is the experts who should know better falling asleep at the wheel and intentionally ignoring reality because of their selfishness and stupidity.
1. Democrats in power could never do anything because Republicans could always block by virtue of having majority somewhere.
2. Republicans blocked everything they could, simply because the Democrats were in power.
3. Democrats then get blamed for not doing anything.
4. the current administration is getting something done, yes. Some things are down the wrong path and shouldn't be done. Some things are debatable but perhaps the right path but doing them in a stupid manner.
From outside the US the view looks very different:
1. In 2016 Democrats choose a candidate based solely on internal party politics rather than to win an election, get routed by Trump
2. In 2024 Democrats choose a candidate based solely on internal party politics (letting Biden run) rather than to win an election, get routed by Trump
3. In 2025 Democrats try their best to put up a candidate for New York mayor based on internal party politics rather than to win an election
Gee, wonder what the pattern is here.
> supreme court isn't helping.
Similar patten here. How did the SC end up like this? If the roles were reversed, would R have done the same as D?
> 4. the current administration is getting something done, yes. Some things are down the wrong path and shouldn't be done. Some things are debatable but perhaps the right path but doing them in a stupid manner.
You really believe that if only D currently had a majority somewhere, the current gov wouldn't be doing most of the stuff it's doing?
1.5 In 2020 Democrats [did whatever and won the election].
So it's not all bad.
But yes, while my comment didn't go over their faults, the Democrats have plenty of their own too. But being blamed for doing nothing when you don't have the power is hardly their fault.
Ultimately, people in US politics on both sides are playing stupid games and winning stupid prizes.
Even when they had majorities, Democrats didn't get anything done. Didn't do anything to try to prevent what is happening now which was entirely expected. Allowed Republicans to steal a supreme court spot.
In opposition Democrats are utterly failing to prevent the Republican agenda anywhere near the way Republicans prevented the Democratic agenda.
I would say it's embarrassing how badly my party has done but that underrates how I think their incompetence has put an extremely real risk of the republic falling into our imminent future.
In the US, our democracy is purposely built to give the minority party almost zero power. If you have less than half the votes in both houses, you can't do anything, full stop.
Go look at how often Democrats have actually won votes. Americans choose not to vote for democrats and then blame them for not having power.
It's ignorance.
Republicans have run this country for 90% of the past 50 years. The public institutions failing have been purposely meant to fail by purposeful sabotage by republican politicians, who openly describe their tactics and publicly boast about "starve the beast", and people STILL blame democrats.
It takes way more time, effort, and public goodwill to build up or reform US government institutions, by design than it takes to tear everything down.
If you are still blaming democrats, you are part of the problem. Blame the politicians who have been voted in, democratically given the reigns of power, and have used that power for 50 or more years to make things worse.
Add to that, republicans have held the majority of State governments for the past 20 years.
It's utterly INSANE the lengths people will go, the stupid rhetorical lies they will tell themselves just to not have to say "The republicans have actively harmed this country for 50 years"
The US system intentionally does not give the minority party any power.
> The Z in Nazi is for "sozialistische" === socialist
No, it's not. Emphatically, demonstrably not.
Ignoring your other stuff about attempting to make the tired "Nazis were socialists, it's in their name, see?" argument, which is just Wolfgang-Pauli-levels of "not even wrong", the "z" in Nazi comes from the German pronunciation of "National".
I might just not be reading correctly, but on the off chance I parsed your comment correctly, I respond to:
> The Z in Nazi is for "sozialistische" === socialist
by pointing out the Nazis were not, in fact socialist. They executed socialists and communists, but called themselves socialist in the same way the DPRK and PROC call themselves republics.
The Nazis and the Communists were different flavors of collective society based governments that put the whole ahead of the individual with a tight control over the thoughts and behaviors of people. Government, business, and industry blended together and you couldn't be in business without sharing the ideology and sharing power with the government.
"not socialism" is nonsense by people who really like socialism, nazism was just a different flavor of socialism and saying otherwise has been part of the propaganda in favor of socialists for a century.
You can be nice and have a socialist society, but it's also a lot easier to have a dictator rise to power in a socialist society because it's easier to hijack the collectivist mindset into a collective with extreme loyalty to an autocrat. You just have to make them angry and afraid.
You've now watered down your frankly crazy statement of "Nazis were socialist, actually" to "Nazis and socialists a group of people that make policies to improve the wellbeing of that group". This fits every single other form of governance, outside of anarchy or extreme versions of libertarianism.
There's absolutely no good reason to ever make the statements you've made, outside of trying to make Nazis look better.
You're the one claiming the Nazis were socialist, which makes you look like a fool at best, and like a liar at worst. A cursory understanding of pre-war politics in German, which you could get from any number of sources, would lay bare how wrong the idea is.
Answer: "Any analysis of the electoral platforms, internal party dynamics and political actions of the Nazis between 1921 and 1945 makes this clear [that the Nazis were not socialist]. Perhaps the German Workers Party - the party of around 100 members led by Anton Drexler that preceded the Nazi Party (NSDAP) - might have sought to cobble authoritarian anti-capitalism (which is not the same as socialism) onto biological racism. The early, pre-Nazi party that Hitler joined toyed with forms of market control to benefit small businesses and to halt ostensible "foreign" - that is, Jewish - control over markets. But such dalliances would not last long."
Answer: "This is standard propaganda for Fox News and the Tea Party. . . . "National Socialism" includes the word "socialism", but it is just a word. Hitler and the Nazis outlawed socialism, and executed socialists and communists en masse, even before they started rounding up Jews. In 1933, the Dachau concentration camp held socialists and leftists exclusively. The Nazis arrested more than 11,000 Germans for "illegal socialist activity" in 1936. . . . In the 1930s and even beyond, nazism, in sharp contrast to socialism, was strongly supported by leading capitalists."
Essentially, the name comes from a few socialists long before Hitler came to power, and the name just stuck even as non-socialists took over (early 30s) and began doing despicable things. It's a bit like saying "Johnson and Johnson is a company comprised of two individuals with the same last name" rather than acknowledging that's just the original name, long before it was rendered inaccurate.
Well, the "Lincoln GOP" was also generally in favor of tearing down and burning confederate flags, so I think it makes more sense to compare things over a shorter time-periods like "in living memory."
Parent poster's explicit "two decades back" scale is entirely reasonable for the phenomenon they are pointing out.
Lincoln was concerned about national unity foremost, and allowing the south to preserve its identity facilitated that after the war. It may have been the most successful reconciliation after a bitter civil war ever in history. Regardless, the economic forces shaping the nation have been shifting around but ever present since the founding. We were fighting about a central bank in 1789 and are still fighting about it today!
And US still needs to protect x86/MS as best NSA source :) There is even "intel" right in the name ! ;) Also business and best and cheap compute cpus. I guess they need a bit of help until some patents go off...
And do not forget foundry with "photonics" tech cooperating with military...
Lack of wild and dumb capitalism is not automatically socialism.
And belive me: socialism is the TRASH - replacing private ownership destroy value and sensibility of any action.
It has broad bipartisan support and was one of very few policy changes promised by the Harris Walz campaign.
Conservatives like it, because it is effectively a de minimus exemption on taxes, simplifying the tax collection process, and liberals like it because it results in more progressive taxes, with tip earners overrepresented amongst low-income earners.
It does nothing to simplify the tax code, and it opens up a universe of loopholes. The concept may have some merit, but the implementation is sloppy and lazy.
I think ultimately very few people really care about simplifying the tax code. The cost of a complex tax code is the $19.95-$200 cost of preparing your taxes, which everyone would gladly eat if it meant they could take advantage of tax deductions on pages 1,455, 19,210 and 245,908 of the tax code totaling > the cost of tax prep.
Simplifies tax collection process ≠ Simplifies tax code
A few lines of tax code means millions of people don't have to worry about unpredictable withholdings due to significant changes in tips from day to day, month to month, and year to year.
Also, what's sloppy about it? It's just a deduction for up to a maximum amount from tips, for a specified list of occupations, with the maximum decreasing as income increases above a specified level. That's pretty simple, as far as tax code goes. What do you think would be a less sloppy way of implementing it?
Are you reacting purely to the phrase "caricature of the far left" in a way that ignores and even goes against the rest of the post, to bring up a guy you don't like and make no other commentary?
Great, another way companies can offload the responsibility of looking after their staff to the customer.
It sounds like a win for the employee, "ah but you don't need to pay tax on your tips". But in reality it's government saying "The company you work for owes you nothing, take it from the customer".
Truly bizarre how this is playing out - was the digital creator carve out requested by the various right wing streamers that are part of Trumps’s core sycophant club? Doesn’t make any sense.
American tipping culture has its origins in the post-Civil-War south:
> Following the Civil War and the abolition of slavery, formerly enslaved Black workers were often relegated to service jobs (e.g., food service workers and railroad porters). However, instead of paying Black workers any wage at all, employers suggested that guests offer Black workers a small tip for their services. Thus, the use of tipping to pay a worker’s base wage, instead of as a bonus on top of employer-paid wages, became an increasingly common practice for service sector employment. In the early 20th century, these employers, who shared a common goal of keeping labor costs down and preventing worker organizing, formed the National Restaurant Association (NRA). Over the past century, the NRA has lobbied Congress to achieve these goals, first by excluding tipped occupations from minimum wage protections entirely, and later by establishing permanent subminimum wages for tipped workers (One Fair Wage 2021).
doctors and nurses have enough power to demand fixed professional(0) wages that "unskilled labor"(1) does not. no one _wants_ to make $2/hr(2) and to have to rely on the generosity of the general public for a living; in other words, it isn't the waitstaff having special privileges but rather the opposite case of them lacking better protections.
(0) which is to say, much higher
(1) a propaganda term if there ever was one. work one shift as a waiter and tell me it take no skill afterwards!
(2) $2.13 barring state-level increases over the federal minimum, to satisfy the pedants
When my grandpa was in the hospital towards the end of his life, the nurses let him lay in his own piss for half a day before doing anything about it. We gave them an envelope with a generous "tip", and after that they started paying much closer attention to my grandpa.
Many people give a few thousand USD cash to the midwife and the doctor after delivering their baby.
which country is this? you tip all service staff? are you presenting me a logically coherent tipping culture or just another version of the american righteousness?
It's not unheard of for people to give gifts to medical teams after a long course of treatment (at least in the UK).
Service industries have an advantage in being short cycle interactions, so even small amounts of social gratuity can be effectively monetised. There're also much more public so other people can see our generosity / stinginess.
"No Tax on Tips" meant for low income taxpayers so most of the major digital creators won't qualify.
Low income digital creators can deduct upto 25k in tips, so if their income from tips and other sources is below $150k a year, their taxable income will be 25k less.
Generally correct, low income digital creators will benefit the most since "No Tax on Tips" will reduce their taxable income by 50% or more in comparison to someone who earns close to 150k which isn't a low income according to BLS as you pointed out.
If you look at tax brackets plus the standard deduction lowering the bracket it affects, it will be a flat or regressive change in take home income amongst the cohort until at $90K or maybe a bit more, double median income, where you can start writing off against the 22% bracket. Assuming 50% tips.
I have no measure of scale on 150k dollars a year in terms of creators scale...
I remember something like 2k$ youtube ad revenue for 1M views, so that's like 1M video every 4 days? or was it 2M views per 1k dollars, then it's 1M video every day?
I've seen that same figure for YT ad revenue alone. sponsorships can range from $0.015-0.030 per video for channels with 1k to 50k subscribers.
at a biweekly cadence, they'd need ~6M views per video to hit $150k with ads alone. if you figure another $0.025 per view for sponsorships, then they would need 6M views per year or about 240K per video.
looking at Patreon stats, it seems reasonable to assume that a channel with 25K subscribers could pull in about 1K Patreon subs with effort. if each is paying $5/mo, then that would add another $60K/yr in revenue (though I imagine a lot of that would get eaten up by fees and extra costs.
The employers already had all kinds of bizarre tricks to keep tipped workers down.
My girlfriend works for a local chain restaurant. Some of the things she tells me about seem like they shouldn’t be legal (forcing everyone’s cash tips to be pooled with non tipped teenagers they don’t want to pay, for example. Pretty sure the company has had previous class actions against them. This was just a small local chain in a middle/upper middle class suburb.
I saw a post on Nextdoor the other day where another restaurant closed, laying off the workers without paying them for hours worked. The general consensus about how to get the money you worked for: you don’t. The state has no labor board and there was little option for recourse.
Not that I'm a fan of tipping culture or the "creator" economy, but it seems like tips and donations to your favorite youtuber are obviously gifts to me? From irs.gov:
> You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return.
Which is obviously true for tips and donations. If it is a gift, then the giver owes taxes, and there is a $19k/year/recipient exclusion, so small gifts like this would always be exempt.
Towards what? No taxes at all? That's not desirable if you want things like public schools and rule of law.
And if you want more progressive taxation, then support more progressive taxation. Treating classes of workers differently is not a way to get to more equitable progressive taxation.
>Why aren’t capital gains taxed at a higher rate than income?
The federal capital gains rates are higher than the effective tax rates paid by a family making a median income, but I suspect you are asking why the capital gains rates are not higher than the highest marginal rates.
One issue is simply that capital gains tax rates generally don't account for inflation. If you build a business over a few decades and sell it, much of the increase in value will be simply due to inflation. Do you want to encourage long term investment, or make it so only financially illiterate people do long term investments?
I suspect much of the attacks against property taxes aren't to right any historical wrongs, but is part of the attack against public education, since property taxes are a major source of funding.
> No, you're renting the physical space -- a scarce part of the commons -- from your community.
Property law in the US and most western democracies doesn’t remotely agree with that. Land is not a communal or solely government owned resource, and the govt doesn’t ‘rent’ it out.
Stop paying your property taxes in the US and see how long it takes before the government forecloses. It is effectively rent under a different name. In exchange the government will protect your property ownership rights so that you don't go on vacation and find someone else now gets to claim your home since you weren't there to stop them.
Note: I think this is a good thing and that property taxes are vital to our local communities well-being.
PSA: the "No Tax On Tips" provision expires:
> New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.
* https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-...
There's also a maximum of $25k/year (~$2k/mo).
> PSA: the "No Tax On Tips" provision expires...
My understanding is that this is true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered. The Economist had a couple of nice analyses on this.
Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature?
The Republican strategy is to booby trap the US economy every time they are in power since Reagan.
> true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered
Not just that - they're often timed to expire early into the next administration which, if Democrats win, is an instant "look how the Democrats treat the working folk!" hammer. e.g. "Tax Cuts and Jobs Act" from 2017, expiring at the end of 2025[0].
[0] https://theconversation.com/trumps-plans-to-extend-tax-cuts-...
Tax bills are universally passed through the budget reconciliation process these days to overcome the filibuster (can do a budget with only 51 Senate votes). That process has many restrictions on what tax changes can do to projected revenues outside a certain window: https://www.ey.com/en_us/insights/tax/prospects-for-budget-r....
> My understanding is that this is true for all the Trump handouts
Only those for humans expire. The corporate tax cuts are forever. Read into that what you will.
Luckily the politicians involved are set to expire around the same time
Those were set to expire this year as well but got extended.
> Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature?
Oh no.
What you have missed is the incredible end run around the spirit of the reconciliation process that the Republicans did this time around.
So, the did these tricks with the tax in Trump's first term, with tax breaks set to sunset in order to have a revenue-neutral effect over the required ten years.
This time around they needed to extend those breaks, right? So they must had to cut spending or raise other taxes in order to do that and have a revenue-neutral effect, right?
Ha ha, no! They convinced the CBO that the baseline for the reconciliation process this time should be whatever was in effect for the last few years. So those breaks are already baked in and don't need to be counterbalanced. It's a two-step, long-term process for making things permanent through the reconciliation process that otherwise one could not.
Is that maximum $25k in tips, or in total income that includes tips?
Tips. The AGI phaseout starts at 150k (300 married).
300k before your tips start to become taxable??
What in the world is driving this very high ceiling?
Kids of rich people now can exploit this loophole. They can get up to 300k from some fake job and do not pay any taxes on the "tips" part of it. Each month the tips part is going, oh surprise, going to be the maximum allowed by law.
So they pay tax on 30k but none on the 2k per month. Not that big of a loophole.
More like on top of whatever “free money” they could have as “gifts,” they can now move an extra $2k/month as daddy’s tip.
Rich people are more likely to pay accountants to come up with complicated ways to exploit the tax system. If the top 5% had access to this loophole, you’d probably end up with some crazy outcome like 80% of money saved from this deduction goes to the top 5% of earners. And that would make the provision more expensive to include in tax legislation (trading off against other things like the headline tax rate). Since “no tax on tips” was a campaign promise, they probably wanted to keep the promise while setting limits to make it easier to fit into the rest of the bill.
They won't pay accountants, they'll tip them!
Only if the accountant’s accountant recommends receiving tips
300k isn’t what it used to be these days with inflation and cost of living. If you have kids and a house, things get expensive quickly.
Get real, look at some statistics, that's more than 3x median
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Yes, it was Ferrari money and now it’s just Porsche money. Poor things.
This is the problem when talking about class warfare. We are eating our own. Someone making $300k a year is closer to the median than someone making $5 million a year. Losing ~30% of your spending power since 2008 might not matter if you're a billionaire but for most working professionals it has an impact.
You make a good point - lumping people who make 500k a year with those making 5 million (or 50 million) a year is bad policy.
It's still a very good income, though.
That’s a typical phase-out threshold for dedications.
In tips
Right on time for them to lose the next election so people blame Democrats.
It's all so cynical.
If Democrats win they could extend them
> If Democrats win they could extend them
And what happens to the debt/deficit then? You know, the thing that the GOP constantly complains about but always makes worse?
The GOP loves to cut revenues (taxes, especially for top percentiles):
* https://en.wikipedia.org/wiki/Starve_the_beast
If Democrats win the presidency, they would still probably need cooperation from Republicans to get an extension through Congress, which means that there are no good options for the Dems.
Yes but this policy is absolutely terrible, so it seems unlikely they would
but it's a very stupid policy.
It's a free tax fraud for everyone! hooray!
"Would you like to leave a tip for your server?" "20%."
"And the cook?" "What?"
"The cook wants in on the no-tax-on-tips so we're asking how much you'd like to tip him. We're also going to ask for the cleaner and the guy who delivered the ingredients earlier this morning."
If you think this is absurd, this is how I feel, coming from a non-tipping country, when I read about the tipping culture in the US.
Yeah, it's optional but if you don't tip everybody loses their minds. I've experienced this once abroad, I was with a group of exchange students that didn't want to pay the tip because students are always broke, and the cashier was mad to the point of being aggressive.
In Brazil we have 10% tip which you can opt out, and we usually do it when there is a problem with the service, but I wouldn't think twice to ask for the tip to be excluded if I was undergoing financial hardships, and I'm sure nobody would bat an eye.
I think it's not just the tip culture that is toxic. I feel like the entire American culture is plagued by toxic masculinity, the gun culture and hyper individuality.
I don’t disagree with your diagnosis of American culture, but the tip thing is just shifting wages from employer to customer. It’s no different from VAT versus sales tax: same result, different math.
Opting not to tip when it is part of the economic transaction is no different from walking out with the silverware; not expressly forbidden, just a breach of social contract.
>It’s no different from VAT versus sales tax: same result, different math.
There's lots of evidence that tips vary significantly based on the traits of the customer (like the customer's self-esteem and sense of shame: https://www.emerald.com/insight/content/doi/10.1108/ijchm-02...) and the employee asking for the tip (e.g. attractiveness and simple demographic characteristics: https://www.sciencedirect.com/science/article/abs/pii/S01674...).
It's absolutely different because a customer is not legally required to tip, and if a customer decides not to, that is directly impacting a worker's take-home pay.
And walking out with silverware is theft, I genuinely have no idea where you pulled that from as a similar example.
> walking out with the silverware; not expressly forbidden
Isn't property theft very expressly forbidden?
Then why call it a tip? It's just cynical then, which I don't know what's worse.
Plenty of customs don’t make logical sense, and plenty of words have dramatically changed meaning over time. Don’t read too much into the word. A “fine” used to mean a voluntary settlement.
You are right, I wasn't really thinking about how customs evolve organically. Outrage kinda blinded me because that experience was such a culture clash that clouded my understanding. Thanks. I mean, I still feel like using the word "tip" for something that is culturally not optional, even though you can opt out, is unnecessarily confusing and hostile, but that's what respecting foreign culture is all about.
> when it is part of the economic transaction
Well, shit, if I made it part of the economic transaction, you'd have a point. What you're saying is that the employers are not holding up their end of the transaction.
In America, at least in restaurants, employers are allowed to pay a lower minimum wage to tipped employees. So tips are an essential part of a servers compensation and should not be considered optional.
Let me put it another way for my foreign friends - if you are dining at a restaurant in America with table service, you need to consider (at least) a 15% tip as part of the base cost. If you can't afford that, then you can't afford to eat out, choose a different option.
Then why call it a tip? The cynicism is just unbearable. If it's a tip people are going to have the option of opting out, disregarding any unwritten social norm that contradicts the actual word used.
Why then 15%? Why not $10 per hour of service for all tables assigned to the waiter?
Why chef who is actually prepping your dish got fixed rate but pretty girl should get percentage of the total bill?
If I order a $100 bottle of wine, should I add $10 for the delivery from wine room? And extra 5$ for the opening? And $5 for refill?
Because what was once an active decision became a default, what was a default became an expectation, what was an expectation became an effective-requirement.
And lo, norms are made, the ratchet turns, culture solidifies, a new line written to the social contract. And tip-dependent workers have non-optional tipping.
If you really want a logic to follow strictly — any worker class whose wages are depressed by expected tipping should be tipped
I love that we're just like "so FYI we decided this particular class of worker is okay to pay less than a living wage but to compensate if they do really good at their job, we're going to make it a social norm that people pay more than their bill costs and they keep the difference."
Wouldn't it make far more sense to just pay them a living wage and charge what that costs and be done? It's genuinely the only part of eating out that annoys me is it ends with a math quiz.
> In America, at least in restaurants, employers are allowed to pay a lower minimum wage to tipped employees. So tips are an essential part of a servers compensation and should not be considered optional.
This actually varies state by state. In Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington the minimum wage does not change tipped vs non-tipped. Also in other states if the pay after tips do not meet the state minimum wage the employer is required to make up this difference.
If you actually look at the data tipped employees make significantly more vs median income in countries with tipping than without.
> If you can't afford that, then you can't afford to eat out, choose a different option.
I think this works if we're talking about a full restaurant, If we're talking about a mostly empty restaurant then even a 5% tip is money that the server would have not otherwise had, pretty certain they'd choose more money over less.
> So tips are an essential part of a servers compensation and should not be considered optional.
Actually, if tips don't bring tipped minimum wage to minimum wage, employers are required to increase pay to minimum wage.
While this is true, good luck asking for it.
^This is how it is in practice
You would rather be let go for performance reasons rather than they will pay you difference in 5$
employment lawyers love when managers refuse to honor their payment obligations. Treble damages.
My understanding is if an employee who gets paid largely in tips isnt making more than min wage, that employee is almost always let go or quits. Employment layers dont love trying to prove a case that is pretty unlikely to be provable.
They can always find a reason, such as "so and so customer complained about your level of service and I can't have any complaints as a business owner" which on its face is a legitimate reason to fire someone.
This comment is very disconnected from the reality of service industry wage theft. Employment lawyers rarely bother with a case where the potential payout is a few thousand dollars.
In theory the federal or state department of labor could do something without the worker needing a lawyer. The federal DoL is useless in such cases and most state DoLs don't seem to do much either.
I don't understand how it's the customer's fault if managers are blatantly stealing wages. That sounds like someone else's problem to solve. If servers make it public, I'll stop going to that place, but preemptively tipping to avoid illegal labor practices feels like a bad solution.
> you need to consider (at least) a 15% tip as part of the base cost
No, I don't need to do anything. Restaurants are free to charge a service fee and state that plainly on the menu, as many already do. Otherwise it's optional and I will treat it as such.
Nah. 10% is standard, 15% is they did something good besides what's expected, 20% is amazing.
But I personally have chosen a different option because it's just exploitive all the way around. The business trying to exploit it's employees, the employees exploiting customers (10% being pushed up to 15%).
It this lower wage true for states like California?
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped 16.50 in California, 20 for fast food workers
as the other commenters didn't answer the question:
No, it is not true for California
I would not be surprised if those poor waiters make more money than their customers.
Americans pride themselves on their rugged individuality but deep down it is all very collectivist.
Explain to me how a society with minimal well care, where people would rather die of a heart attack than get taken to a hospital, where you need to save your entire life to afford a mediocre education for your children... How is that a collectivist society?
The toxic tipping culture is spilling abroad too.
Several restaurant owners are advocating in Italy to make 20% tips mandatory so they can reduce their costs.
It's not "spilling abroad". Italy had tips built into their bills when I went there over 20 years ago.
In Italy tips are never required as are a part of what you pay for. You leave a tip for outstanding service if you want, but it’s neither mandated nor customary.
No one's saying they're required. When you say it's not customary, how do you reconcile that with it being printed as part of the bill?
If it is printed on the bill it is not a tip. You must be talking about "coperto", i.e. servics costs. This money does goes to the waiter.
That's just paying with extra steps.
Nonsense.
What you're referring to as "tip", is the coperto. It's a minimal, fixed, optional fee that includes service, bread and table setting.
Not every place makes you pay it, it's more common in more expensive restaurants, but still, it ranges from 0 to an average 2 euros per person.
Comparing it to %-based mandatory tips in US is nonsense.
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Tipping has a powerful advantage: it aligns the incentives of customers and servers almost perfectly. Because tips aren’t capped, waiters are motivated to go above and beyond to satisfy each guest. Without tipping, the server’s motivation often drops to providing only adequate service—more in line with the restaurant’s interests than with each individual diner’s needs.
You can see this difference in customer experience worldwide. Nowhere delivers consistently attentive service quite like the US. By contrast, many European countries, especially those where tipping is uncommon (such as the Netherlands), often provide service that feels efficient but impersonal.
That might make sense... until they ask you to tip before you receive the service! When I order a coffee at a small shop, and the card terminal asks me to select a tip (displaying the default choice of 20% centered and in bold), how am I supposed to know whether the coffee will be good or not? As a regular customer, sure, you'll have an idea of what the general level of service at this place is like. But the expectation these days is to always tip, even if I've never been there before and I have no way of accurately judging the quality.
I never tip before receiving the service. Always hit zero. It feels a bit weird to begin with but you get used to it and i've not been treated any differently. A tip is generally not required for coffee or to-go/counter service.
That's anectdotal. There is literally zero alignment or correlation between tipping and good service.
You want to have a stress free experience the waiters tries to upsell you at every corner.
If you mistake upselling for attention then you're part of the tipping complex already.
Good service comes from good training and experience not the assumed money left over in your wallet. That's the businesses goal of not leaving any money on the table. So the alignment is between the business owner and the employee if anything, not between employee and customer.
I would make an exception for bars, but that's about it.
>That's anectdotal. There is literally zero alignment or correlation between tipping and good service.
The correlation is simple. The better the perceived service from the customer, the bigger the tip is.
>You want to have a stress free experience the waiters tries to upsell you at every corner.
In the vast majority of restaurants the server has little interest in upselling you. The exception is, perhaps, at a place with an expensive wine list (and regardless of tipping, businesses will be looking to upsell that wine list).
>Good service comes from good training and experience not the assumed money left over in your wallet.
Speaking as someone with industry experience, this is honestly just funny to read.
Training? For a server? Lol!
These are by and large scrappy people (and I say this lovingly). Lots of cursing, dubious substances, people working hella long hours in other jobs, people who are just planning on working for a few weeks and then leaving, etc. Yet when a big table comes in, they button up and act perfectly, despite cursing about the customers in the back, and the incentive is not "up selling" (servers care about seat count and nothing else - that's how the hierarchy of the seating pecking order is structured) it's about tip money.
Good service doesn't come from experience either. The newest servers will basically give the best service (they're nice to everyone), while often the most experienced servers are the most jaded and cranky. It's a rough job to be part of long term and it breaks you down a bit.
Also, regulars who tip well are truly appreciated by the service staff, and the staff really does go out of their way to make sure they get good service. This is because of the steady, predictable income stream. I don't know what to tell you other than, yes, the tip money absolutely does play a large part in the customer experience, and there is a correlation.
> Nowhere delivers consistently attentive service quite like the US.
I have found this to be true in pretty much all interactions (on average), regardless of whether the person is on a tipped wage.
Americans value salesmanship and customer service in ways that few other countries I've been to do. They market better, they sell better, they make customers feel better, in pretty much all types of businesses.
Source: someone who's lived in three major US metropolitan areas, and two in the EU.
Here the other thing - sometimes I don't want extra service, I just want my food and that's it. But the waiter will try really hard to impress me with something I don't want.
Then I'm the bad guy for refusing to pay for something I didn't want in the first place.
No. You still have the right to not tip.
Personally, I could do without hyper-attentive wait staff.
Dining out in Italy is phenomenal for many reasons, a laid back serving culture is just one of them.
As a Dutch person I despise fake smiles and servile attitude.Especially when it is bought with money.
In US I got exaggerated smiles with *winks* from waitresses. No, they were not genuinely flirting with me.
> Because tips aren’t capped, waiters are motivated to go above and beyond to satisfy each guest. Without tipping, the server’s motivation often drops to providing only adequate service—more in line with the restaurant’s interests than with each individual diner’s needs.
Do people tip their accountants? Their nurses and doctors? Their dentist? Their mechanic? The cashier at the grocery store? The clerk at the shoe store who fetches the shoe in the size/colour I want?
Perhaps people should just do their jobs properly because that is what they're paid to do. And if they're not doing their jobs such that the restaurant/business suffers in its reputable they get fired and replaced by someone who will. (Kind of like how I have to do the job I'm paid to in IT or the company will act accordingly if I do not.)
No, but if you gave these people extra $ to pay attention to you - on average, they would.
Before my Lyft trip to the airport I got a notification from the app: “Add a tip before your ride.
Make your driver’s day, they’ll see your tip before they accept your ride”
It's getting harder to get the drivers to accept rides in some situations. Recently, I watched some Uber driver accept my ride and then drag their heels to pick me up in the hope that I would cancel. They didn't like my destination.
This reminds me of the old Soviet union where the rates were fixed by some central committee. In order to get a cab to pick you up, you would hold up fingers that represented how much extra you would tip. The more fingers, the more likely the drivers would actually stop.
Does Japan have a strong tipping culture ?
If you consider strong tipping culture to mean "severely insulted", then yes!
Good to know.
But why exactly ?
I believe it's because tipping implies they need a money incentive to do a good job. Essentially insulting their professionalism.
What you’re describing is how it _should_ work. Instead every server feels entitled to 20% regardless of how bad their service is and it is frequently atrocious.
Besides, I’d rather have efficient and impersonal than (at best) fake nice.
Living in rural Spain service is chill. Am used to it by now. Went to an upmarket restaurant in France other day and it took me ages to realise the waiter was vibing me the whole meal for a tip. Such a weird transactional space. Person literally smiling and being agreeable for money. Insane.
>Person literally smiling and being agreeable for money. Insane.
And you think other hourly service workers aren't being that way to some degree? Lol.
> And you think other hourly service workers aren't being that way to some degree? Lol.
Like plumbers, electricians, mechanics, carpenters/framers?
“Insane” is probably a bit strong
> Nowhere delivers consistently attentive service quite like the US.
This paragraph reads like it was written by someone who’s never been to planet earth but has diligently read documentation on how it works.
FWIW, it matches my experience in the three countries I've lived in and the dozen others I've traveled to.
Or it just matches your own cultural preference.
I personally _hate_ American service with passion.
I prefer to be left alone most of the time in restaurants or not being talked to like the best friend I haven’t seen from the high school.
I also have an expectation that the waiter is not in a desperate position to rely on a tip for their living and is fairly compensated by their base salary.
No, it matches my experience.
My preference isn't necessarily for American-style service, that's just an assumption you'd be making with zero information.
To be fair, tipping the cook makes more sense to me than the waiter. I come to a restaurant for the food, I don't particularly care about the service beyond a certain baseline. It never makes sense to me that waiters can earn more with tips than kitchen staff.
Yes it seems totally arbitrary. When I first visited the US I paid for our group, and didn't tip the waiter because he got our order wrong, and was met with aghast faces. I didn't realise you're supposed to tip EVEN when the service is bad!
The employer is shifting the responsibility of wages to the customer (you). It is customary in business to pay a wage even if an employee makes a mistake. The tipout structure of most restaurants, where the server tips out the kitchen and support staff, also collects a percentage of all *sales* from the server's tips, so not tipping results in a server paying your tipout from their tips just for the privilege of serving you, hence the agast faces.
Tipping should be illegal to substitute for pay. Majority-tipped restaurants are almost always predatory and take advantage of both customers and employees in order to further enrich the owners.
«Tip-pooling» is common many places. This implies that tips is shared between employees, for example including the kitchen staff.
I don't think that's true in the vast majority of establishments? Tip pooling usually means that the front of the house staff pool their tips. Not that they share with the entire restaurant.
Yeah, I don't know anything about the majority of establishments.
My single reference is the Norwegian upscale restaurant Theatercafeen, which introduced tip pooling across waiters and kitchen. It was highly contentious when introduced by the restaurant: The waiters took the case to the courts, and it went all the way to the supreme court of Norway [1], where it was decided that the employer could decide rules for tip-sharing.
[1]: https://www.arbeidsrettsadvokater.no/domstolsnytt/dom-deling...
That’s a very engineering viewpoint. But much of the world values the whole package, including clean and neatly set tables and place settings, advice on the menu, timing of courses, QA of prep and fixing issues without customer intervention, help with any mishaps like spilled drinks or dropped silverware, boxing of food to go, etc.
A utilitarian only interested in pure food quality is much better off cooking at home. You can do better at a quarter the price.
Food/software is only about 25% of the cost and value in these businesses, though perceptions on value differ of course.
In the US, the cook and busboys and other support staff normally also receive tips as part of the "tipping out" system where the servers split part of their tips. It is voluntary but not really - if you, as a server, don't tip out your tables start not getting their food as fast and the table isn't turned as fast.
I have a question for the American's in the audience here.
There's always this narrative about tipping allowing for exceptional service and I wanted to know what meta advantages or options have you been given or seen as a result of this?
I'm reminded by Charlie Sheen's character in two and a half men consistently tipping the pizza delivery driver who brings him a champagne bottle with his pizza.
As a comparison elsewhere, I've had French wait staff bring me bread at the table whenever I visit Paris and even if the restaurant is out they source it from nearby restaurants unprompted with no expectation of a tip even though I would perceive that as being above and beyond service.
I'm trying to understand if we're all on the same page about great and even exceptional service :)
As an European (Romanian, more precisely) who has visited the USA, I would say that servers there were much more patient and attentive than servers I'm used to both from my own country, and from various European vacations. I still remember a young waitress who repeated all of the options on the menu literally 5 times going around a table of 15 people.
However, I'm not at all convinced this is as tied to tipping as people claim. My own country has a very clear and old tipping culture (though 10% is the more common "target" tip for food service), and yet service here is often terrible, with bored and annoyed waiters. I think it's much more of a cultural norm than any kind of strong economic incentives.
I find the main difference between the US and Europe to be cluelessness and very different views about what good service might look like. My conclusion is that good service comes from management valuing good service and training (or firing) their staff accordingly.
The most common difference: restaurant wait staff aggressively removing plates as soon as or before you are done with them. While in Europe that obviously would be rushed and seen as overly aggressive and a hint that it's time to get the hell out to make space for other dinners. Super rude in Europe, considered attentive service in the US.
Striking experience: At an allegedly "five star" resort in the US, some wait staff being very loud and chummy with the guests to the point of disturbing the guests, and other guests, and neglecting other tables! Inconceivable in Europe - reserved for top management or owners. And failures to pay attention left and right - by all the staff everywhere. Clearly blameable on management defining the wrong parameters as objectives to their staff.
Tipping in the US is entirely hit or miss: some staff will remember past tipping, but only some. Some staff make a visible effort at service (before tipping), but only some. Etc.
But to be fair, there was a time when service in Paris got so bad and rude that the waiters corporation ran ad campaigns asking them to cut it out and do better. French service still has a bad reputation (of rudeness and scams). And there, it's very much NOT that waiters don't know what to do and not do. They know.
I would see working out "out of bread" with the neighbors as normal when the restaurant is not super busy, and "above and beyond" at rush hours. But then in France, running out of bread before very late in rush hours would be a clear management failure.
Ironically, as an American the only time in my life when I had a waiter effectively ask us (a couple) to hurry up so other diners could sit, was at a Michelin starred restaurant in Naples, Italy. We hadn't even been there an hour, weren't even done eating yet. Perplexes me to this day.
I'm not a fan of tipping in general, but as an American who has spent a lot of time in Europe, my experience is that the level of service in American restaurants is quite a bit higher than in European ones on average. That's not to say that in Europe it's bad service per se, and in certain ways I actually prefer it in Europe where the server isn't constantly "checking in" on me while I'm trying to have dinner.
I can't speak for the rest of Europe but, as a Brit, I find this kind of overbearing and inauthentic type of service somewhere between cringe and outright annoying. Especially when it's accompanied by a lack of competency, for example missing items or not doing what they said they'd do.
A lot of people feel this way, but as someone with experience here, it's also not just about trying to be overbearing.
Remember, servers are dealing with the average American. A decent portion of the people that come in are extremely demanding. /Three rounds of sauce on the side in different configurations... Can I have the sauce from that dish on the other table on the side of my dish? Oh it's part of the cooking process? Can you ask the chef if he can put it in a little ramekin? Oh it's a sickly sweet glaze that needs to be cooked? I think I'll try a little bit of it anyway. Ewww this is disgusting take this back!
Dealing with this day in and day out will default you to that service state after a while, especially because the "average working class Americans" often tip the best.
Every server knows screwing up the actual food nukes their tip (and it often does). If they're working in that context and still messing that up, well, they probably can't be helped.
> That's not to say that in Europe it's bad service per se, and in certain ways I actually prefer it in Europe where the server isn't constantly "checking in" on me while I'm trying to have dinner.
I want them to check in to ensure that the order was (a) correct, and (b) properly cooked.
There may be instances in which you drop some cutlery or need an extra napkin, and a quick check-in could be useful. You could also flag them down with a raised hand or eye contact. A busser could achieve the same results too (also refilling water glasses).
I wanted to know what meta advantages or options have you been given or seen as a result of this?
None for me.
I honestly think it leads to much worse service. The waiters end up calculating every action they make to a money value, leading to every interaction feeling transactional. Creeps me out.
I don't like the idea of even more expectations for tips, since we're already tip-fatigued. Despite that, I'd rather have less rules and taxes and have them actually enforced than have a situation where people pocket the cash portion of their tips untaxed anyway, which only punishes honest people.
It's pernicious. I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server (in the places I've been to, it is). Tipping needs to die and it's frustrating to see it starting to proliferate in some European countries.
Just hit the zero tip option and move on with life. If a seller can’t advertise the price sufficient to sustain their business, that is their problem.
With a small amount of sadness, this is the conclusion I'm starting to end up with. Yes I think waitresses and service workers should make more money. But tipping in the US has become opaque, expanding everywhere, and the expectations around tipping seem to be getting ratcheted up constantly. A business is not viable if customers have to pay your employees separately. I'm close to hitting the nuclear button and just defaulting to zero.
My bright line rule is that I won't tip before service is rendered. If I'm asked before, I can't judge the service, and therefore making a tip decision is impossible.
In Japan, the service is amazing, and you don't tip.
If you leave money on the table, the server will chase you down, to give it back.
In the US, you get shit service, and they give you the stinkeye, if you don't tip at least 20%.
Happened to me once in Thailand, I was very surprised.
Truly USA is an overpriced country with the only good thing being that jobs are high paying… and that’s it.
I think the best thing in life is to have a remote job somehow + travel 50% of the time + stay w friends and family 50% of the time
> USA is an overpriced country
The USA is ranked sixth in purchasing power in the world, meaning we are definitionally underpriced.
The countries that have even more purchasing power are: Norway, Macau, Bermuda, Singapore, and Luxembourg.
https://www.worlddata.info/cost-of-living.php
Let's see... two tiny countries that specialize in finance, a city-state that is the historic trade hub for the region, another that is the historic gambling hub for the region, and a low-population country that won the oil lottery and has been smart enough not to let its residents get high on their own supply, thus avoiding the worst of "the resource curse."
Idk, as an European, coming to US 20/10 years ago was cheaper than traveling Europe.
Today? You're easily paying 3/400$ per night in Manhattan and other cities. Same is true for dining, museums, transport.
Everything is insanely expensive compared to what it was just few years ago.
Services are even more expensive.
I was in Japan last month, tipped 4 times, once it ended up awkward with the waiter insisting me to take it back, the other 3 times they accepted it gladly and thanked.
Why would you want to spread tipping culture?
Yes this is so cringe, but it makes me kind of laugh. Of all the things the Western world historically imposed on Asia, it makes me laugh this is what made me feel is most cringeworthy as of recent.
Please keep your tip customs out of our culture. Next time just say thank you several times to show you appreciate them.
I don't tip for the sake of tipping, I do it when I receive a more than excellent job.
"When in Rome, do as the Romans do."
Times are a changin’…
I wouldn’t be surprised if they are being instructed to accept tips, in order to keep the customer happy.
I think culture is changing and the waiters are increasingly immigrants.
I don't know if that's true for Japan. The only non-Japanese folks I knew, over there, were Chinese, and they weren't exactly the types of folks that waited tables.
In recent years Japan's immigrant population increased by 500 to 1000 people *every single day*.
Many of them end up in hospitality, especially in touristic places, due to different reasons, but very importantly, immigrants from south Asia generally speak English fluently, something Japanese people rarely do.
I've seen plenty of "japanese" restaurants in Shinjuku where not a single member of the staff was japanese.
Another place where you're gonna see plenty of immigrants are all convenience stores.
> I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server
This may be the case some of the time, but from what I’ve seen and heard…
During COVID, everyone put out the tip jar. It turns out that some folks are willing to give in spots that are not “traditional” tipping situations.
Some folks just have extra money, and they are happy to share their wealth with others. This is doubly true in hard times.
Tips are one way to do that, and some folks do that with extra generosity.
I will also add that people seem to be more than happy to tip/give extremely generously to folks who “make their day”. Maybe it’s a great ride share driver, or a great massage therapist, or an online streamer, or whatever. Some people seem to be more than willing to tip folks who bring them joy.
All that said, if that’s not your style, just click skip and move on. Most people understand and won’t judge.
There are a handful of entitled people who will try to guilt people into typing in non-traditional tipping spots. Just don’t go back to those places if at all possible — those people suck.
The most frustrating thing has been the tip prompt that happens before service has been rendered. A tip is based on service. If you haven't received the service yet, the fuck is the tip meant to reflect? That you succeeded at breathing?
Why should we bother lying? It is just a bribe, to hopefully get better service.
I have a diametrically opposed take. I prefer tipping before.
It's my way of giving someone a little appreciation because they're (typically) doing a job I wouldn't want to do myself.
It's got virtually nothing to do with the quality of service I get. I always tip the same amount even when service is bad. There have only been maybe 3 exceptions in my nearly 3 decades of adult life.
I'm fortunate to be able to afford a little bit of generosity for service people, so I do it.
Edit: I should add that, in places where there's a customary tipping practice (eg: US restaurants), I tip above the customary amount no questions asked. The "generosity" is the amount above customary.
The problem stems less from how it might have originated and more from what it results in.
Multiple times I've been travelling for dinner with coworkers and someone notes "oh, tip is already included here" (be it the group size, the way the place works normally, or whatever reason) and then half the table starts redoing the receipt because they were tricked into it. This example highlights it's not always about intent, work already has a set policy of how to tip (i.e. no generosity or etc involved), people are just getting plain tricked into doing something else instead. Regardless - it's successful in the growth of tips, so it spreads.
Similarly, "just click skip and move on" puts the friction in the wrong direction - especially if you're not alone. It's great that it can apply a lot of the time, but the problem is it has friction, sometimes strong, in certain scenarios - again, this friction is only weighted towards the growth of tips.
Lastly, the vast majority of people have some level of desire to be fair, even if they don't want to be generous. Any uncertainty which can be created in the tipping process ("am I supposed to tip here?", "is the tip in the service charge, if so how much goes to the person/how much were they expecting to get in total?", "is the recommended tip on the receipt more than I expected", and so on) tends to push people to tip more than their generosity alone would have inclined, and it's really quite unfair to say the solution is to just click skip and hope all will understand each time.
Unfortunately, there is pretty much nothing pushing in the opposite direction. Your options as an individual, or even sizable portion of society, are to shit on the wait staff's income about it in hopes they complain enough that management gives them a better salary (that'd take quite the movement). Everything about this side has the exact opposite incentive pressures as the above, and so whether particularly generous folks are a factor or not... there's really nothing that's going to get done about it for the typical person.
Maybe we can start some place in the middle of "being able to walk into a place and understand what the cost will be up front", such as including tax in the base prices of things, and it'll open more doors about tipping for the same consideration. Until then, we all are stuck with dealing with it.
"Your options as an individual, or even sizable portion of society, are to shit on the wait staff's income"
My primarily option is to multiply the estimated cost of going to the restaurant by 1.3 (tip+tax) and make my decision about going there based on that figure, not on published menu prices.
That's a good estimate for an individual visit as of today but is precisely the kind of thing that which has resulted in "normal" tips going from +.1 to +.15 to +.2 as the years go on (erring too low has more friction than erring too high, and if something else raises the amount traditionally tipped somewhere then "normal" for this will tend to adjust upwards in a large group).
Will owners realize at some point that the tips are really coming out of their pockets? If a guest has to pay $10 tip, she will buy $10 less food.
The staff wages (what tips offset) come out of their pocket either way, advertising the lower price is just a marketing technique.
Yeah, this is going to incentivize businesses to try and make as much of their employees' pay come from tips, which means consumers will be expected to pay more tips, which is the opposite direction I want it to go.
> since we're already tip-fatigued
Bluetti hit the "are you actually fucking serious?" level for me with the tips. They ask you for a % tip when you order online from them. No employee contact, no consultation. I just added a $2k item to the basket, tried to pay and got an invitation to tip extra.
I guess the good news is now we can ask the server their marginal tax rate and reduce our tips accordingly
I do like the idea of people doing stuff for free for the public benefit and asking quietly for tips on topic with the article re: "digital creators".
Flattr - are they still around?
Edit: closed in 2023 after 14 years.
I think one aspect that is understated: "No Tax on Tips" is only a deduction for the purposes of federal income tax. W-2 workers still owe FICA and other payroll taxes on such income, and similarly self-employed workers would still owe self-employment tax.
To me, a more appropriate name is "Some taxes on tips".
And most of their tax is already at the state level or FICA, so it's more like, "most taxes on tips, unless you make decent money, then you bet a break."
But that's not winning an election.
$1 subscription, but "This content is only available for my top 1,000,000 fans" ranked by tips.
Oooh, I like this. Reminds me of charity auctions.
That must be where Onlyfans was inspired to emulate the business model.
The exemption doesn't apply to performance artists
More like chastity auctions, am I right?
I like the idea. How to implement in transparently in away you aren't always the 1,000,001 one?
Service provided by Patreon.
I’m more concerned with no tip on taxes. Sales tax is usually in the subtotal that tip percentage are calculated on. Most POS I’ve seen do this way
Before someone is confused: POS here means “Point of Sale”, not “Piece of …”.
Roughly equivalent anymore, though.
"No Tax On Tips" is so stupidly regressive and yet another addition to the complex tax law. Somehow we decided a waiter making 100k with tips needs more help than a stock worker at Walmart.
It isn't "no tax on tips" that's regressive, it's tips themselves. If tips are a gift, then they should be taxed as gifts are taxed. End tips and raise wages, and the taxes cease to be confusing or controversial.
For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children.* Why do they get to do this?
Or to take it to absurdity, why aren't my donations to charities taxed? What's the reason for the carveout? Should I instead donate earmarked cash to a charity that provides assistance to underpaid waitstaff?
[*] If you didn't hear that the other half are getting this, now you know: https://www.savings.com/insights/financial-support-for-adult...
For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children. Why do they get to do this?
For the same reason we have a generous gift tax exemption applicable to any gift from anyone to anyone: If you’re not receiving something of monetary value in return, what you’re providing isn’t “income” in the sense Congress has built income tax policy to capture.
That isn’t the case with tips for waitstaff.
Well, this year I suppose it will be $1,583.33. That's just the gift tax exclusion ($19k this year) at work. I don't really see a problem with it. People should be able to give money to family members without penalty.
> End tips and raise wages, and the taxes cease to be confusing or controversial.
Some businesses have tried this, but often it doesn't work out. To make this financially feasible, it would require action at the federal and state levels to 1) eliminate different tipped vs. regular tax rates (some places have done this already), 2) and modify how payroll taxes work to even things out a bit. It sounds like "oh, no problem we'll just raise prices by 20% to cover the extra salaries". But no, that doesn't work, because businesses and individuals are responsible for payroll tax on non-tipped salaries.
And there's a collective action problem at play: take two identical restaurants. One follows the now-standard model of accepting tips, and ~20% is customary. Their identical competitor won't accept tips, pays their staff better, and charges 20% more for their food. Fun outcome: people get sticker shock at the second place and go to the first place instead, even though in the end they pay exactly the same amount. Human psychology is dumb, and restaurants know this, so they won't do this unless all their competitors are also required to do it. (This is also why in the US prices are advertised tax-excluded; pricing that includes tax is viewed as more expensive, even if the final charge is the same.)
That survey is stupid in this context, as it include everyone 18+ as an ‘adult child’, which includes a lot of college students. There’s nothing malicious about supporting your kid in college, nor would it make any sense to tax that.
Nothing wrong with giving money to your kids in general. That income has already been taxed. If they were paying the kids for pretend work and taking a deduction for the higher-income parents, that'd be different.
> As you might expect, Generation Z adults (ages 18-28) receive more financial support from their parents than their Millennial counterparts (ages 29-44),
I mean, yeah, something like a third the former are college students! What a trash fire of an article.
"no tax on tips" was a pandering move to the mostly financially-illiterate populace that still don't understand progressive tax systems. Singling out certain types of income makes no sense and is very unfair. I wouldn't be surprised if this actually ends up resulting in less tip income over the long term due to people going "wait my income is taxed but theirs isn't, why should I tip as much?"
Don't worry, no tax on tips actually phases out relatively quickly (2028) while the tax cuts enacted for the 1% are there to stay.
edit: fixed year typo
Non-tip workers won't remember (or even notice) the phase-out. The damage is done and I agree it will incentivise people to tip less even after the phase-out.
2008?
Extending the 2017 tax policies, specifically continuing the capping of SALT deductions, leads to higher taxes for high income earners. That deduction was worth $100K to a $1M/year income in a 10% State income tax state earner. Even more when you add in property taxes.
If they had not been extended the taxes for those high earners would have dropped for 2025 and beyond.
The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
> the top 1% still pay 40+% of federal taxes
No. They pay 40% of Federal income tax, specifically.
https://nymag.com/intelligencer/article/fact-check-richest-1...
> The bottom 50% pay no taxes
Same mistake here. They pay plenty of payroll etc. tax.
The numbers from your link are:
The top 1% pays 24% of Federal taxes, and the bottom 50% pays somewhere between 7% (bottom 40%) and 16% (bottom 60%).
Yes, that sounds about correct. It's a lot more than "bottom 50% pay no tax".
Also I'm unclear if that source includes only the "employee half" of the 15% FICA.
That’s a crystal clear sign that the top 1% have way too much money.
Yeah this argument is so silly: "the top 1% pay 60% of income tax" oh okay, so as they get closer and closer to escape velocity from the rest of us, that number will climb to 1% paying 70%, then 80%, then 90%, so your argument to tax them gets weaker while the functional need to tax them gets stronger.
Brilliant!
Thank you for understanding what I was trying to say. :)
no, employees do not pay payroll tax, employers do.
I assure you we do.
https://en.wikipedia.org/wiki/Federal_Insurance_Contribution...
> The Federal Insurance Contributions Act (FICA /ˈfaɪkə/) is a United States federal payroll (or employment) tax payable by both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.
7.65% of your check until you hit the cap. Employer pays a similar amount.
Additionally, removing the cap on FICA contributions would likely push Social Security back into long-term solvency, but that would be far too much of a burden on the top 1% of wage earners so it’ll never happen.
To be precise, social security maxes out at around the income of the 93 percentile of income
https://dqydj.com/income-percentile-calculator/
But that would also mean uncapping the maximum amount you are eligible for for social security.
It wouldn’t _have_ to, that’s a political decision not a mathematical requirement.
But, even if you did it would still help tremendously and possibly still be sufficient. There’s diminishing returns where lower income people get a higher percentage of their income as a social security benefit. As long as that policy is maintained the ultra high wage earners would be contributing far in excess of the benefit they get paid back out
In that case it’s no longer about social security it’s just a 12.4% marginal tax increase (employer + employee).
> But that would also mean uncapping the maximum amount you are eligible for for social security.
No? Why would it mean that?
Currently, the amount you put in social security over the years determines how much you get when you retire. Why would anyone support a system that is suppose to be to help you in retirement where you are paying an unlimited amount into a fund and then capping how much you get out?
Because they likely already have more than enough and have been blessed by society/civilization as a top earner who will enjoy a comfortable retirement without any social security, and they’ll be better off if other people that didn’t earn and save as much are able to retire without being destitute in old age.
That perspective could be someone who is willing to say “You know what, I already have enough, let’s make sure the floor is raised for everyone.” Someone who believes more in individualism would probably disagree with that perspective.
You think someone making just over $175K (the current social security taxable maximum amount) is able to save enough to ensure a comfortable retirement?
I would hope so, I make half that right now and will be able to save enough for a comfortable retirement but I save almost half of my income.
I love when people say that “I live in East MiddleOfNowhere Nebraska with no kids and I can save half for my retirement”.
> Currently, the amount you put in social security over the years determines how much you get when you retire.
Currently, there's also a maximum amount of benefits. That could easily stay.
> Why would anyone support a system that is suppose to be to help you in retirement where you are paying an unlimited amount into a fund and then capping how much you get out?
Same reason people pay school taxes if they don't have kids. Because we live in a society, and we tax people to fund things like this.
So you want to raise the marginal tax rate by 12.4% (employee + employer) without the person getting any benefit?
> Same reason people pay school taxes if they don't have kids. Because we live in a society, and we tax people to fund things like this.
And educated children, police, roads, etc benefit society and we were all at one point kids who could take advantage of public education, I don’t even have a problem paying more in taxes for universal healthcare that will reduce my + employer expenses on my healthcare.
But paying an extra 12.4% for what was suppose to be a retirement account that I don’t get any benefit from and reduces the amount I can save toward my own retirement is a bridge too far. Since 2018, I’ve been slightly above the increasing social security maximum. So it’s not that I’m one of the 1%.
Pet peeve/nit, but social security is not a retirement account.
Our taxes are a way of funding current retirees' (and other SS recipients') benefits, not a way of funding our own individual future benefits.
The fact that paying more in increases our future benefit doesn't make it a retirement account.
It very much is. The more you put in the more you get out. From a financial accounting standpoint, the money you put in goes in a “trust fund” that is constantly borrowed against. It was never suppose to be that way. Social Security taxes is not allocated for current retirees. It just goes in the general budget.
It is not a personal account where what you put in is yours. You don't have a balance that runs down to zero if you live too long.
"The more you put in the more you get out" is only because that is how your benefit is computed. It is not because there is a certain amount of your money somewhere.
Related: your benefit is calculated on your 35 highest income years, not the total sum of your contributions. [1]
Other thing worth noting: the AARP page about SS myths that literally says: "Myth #7: Social Security is like a retirement savings account." [2]
The trust funds for social security are used to pay for everyone's current benefits and the rest is invested [3]. The fact that it's supposed to remain solvent still doesn't make it a retirement account.
Yes: it feels like a retirement account because you pay in now and (hopefully) cash out later. But that is only a feeling.
And finally, I started my GP comment with "nit" as one of my first three words because I understand the distinction is somewhat hair-splitty, but it is still real and relevant to how we think about it.
1- https://www.forbes.com/sites/ebauer/2020/11/11/social-securi...
2- https://www.aarp.org/social-security/myths-misconceptions-ex...
3- https://www.ssa.gov/oact/progdata/describeoasi.html
And stores pay sales tax.
> By law, some payroll taxes are the responsibility of the employee and others fall on the employer, but almost all economists agree that the true economic incidence of a payroll tax is unaffected by this distinction, and falls largely or entirely on workers in the form of lower wages.
Who is charged the tax and who pays it are different things.
In some states, the stores are the ones that owe the "sales" tax (which in these states are actually excise taxes that the business can pass through to the customer).
The "tax" the customer pays in those states is the "pass thru" charge. To make things fun, Hawaii imposes the excise tax (on the business) recursively on any tax charges passed thru to the customer.
this is roughly equivalent to saying "we don't pay import tariffs, importers do".
it may be technically correct, but it still impacts individual costs/income at pretty much exactly the same amount, because the costs are just passed down the chain.
> That deduction was worth $100K to a $1M/year income in a 10% State income tax state earner.
What? Income deductions are only worth the marginal tax rate on that income -- ~40% on $100k of income deducted is worth ~$40k. (With the $10k SALT cap, he can still deduct $10k, worth about $4k.) The top bracket being reduced from 40% to 37%, and starting at a higher income threshold, likely saved the same high earner more than $36k.
You’re over mathing here - GP is simply saying that if someone lives in a 10% income tax state and makes 1m, they can deduct $100k from their income (presumably because it was never really theirs).
They specifically make the claim that the TCJA is a net negative for this hypothetical $1M earner in a 10% income tax state, and I don't think that's true.
> The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
This tells us nothing unless we know how their relative income shares. If the bottom 50% earns only 20% of all income (just an example) this is quite fair. If they earn 60%, it's unfair.
The number of people who just trot out this statistic without context is quite tiresome.
And of course everyone pays sales tax, property tax (even if they're a renter), payroll tax and so on.
Varies by year, but top 1% share of income is around 21% right now in the US:
https://ourworldindata.org/grapher/income-share-top-1-before...
i.e. the US tax system is still fairly progressive despite what many people think.
See this chart: https://media4.manhattan-institute.org/wp-content/uploads/co...
True, though it's irksome how the chart conflates "Rich" with "High taxable income."
These are not the same, which is exactly the problem!
eg: The #1 most wealthy American is Larry Ellison, whose net worth increased $89B today with zero tax implications.
What do you think should happen to you if your house is more valuable in a year than the year before, even if you aren't selling or otherwise leaving that house?
This varies wildly depending state you live in - some states adjust property taxes for current value, some don’t (or do but with severe limits)
But do they do income-like taxes on the added value? This seems to be what people (GGP) are wanting from the increase in stock values, ie, unrealized capital gains.. which is frankly terrifying.
They increase property taxes, so yeah, you're getting taxed on a capital gain that you haven't realized yet (and won't until you...sell your house).
What do you think should happen to people's retirement accounts each year then?
Nothing. Retirement accounts are tax deferred or tax free. What a weird question to ask.
Well, if you want to tax the stocks that the wealthy own.. why wouldn't you want to tax the stocks that many regular people own? Where do you draw the line between the two?
Wealthy people's stock in retirement accounts would also not be taxed. This can be considerable: Peter Thiel's Facebook investment was made in an IRA.
I imagine there'd be some net worth number, excluding retirement accounts, that policy wonks could work up. You draw the line between "wealthy" and "regular" there. Or, more likely, several lines because there would be wealth brackets similar to income brackets. Without that it would be a regressive tax.
Why not just tax when someone SELLS the stock, or leverages it for a loan instead? You know, when they actually use it?
I'm actually against property taxes, or any kind of tax where you risk losing property just because you managed to live another year.
I don't disagree with that. But it's a much bigger discussion. Abolishing all property taxes means city and county finances need fundamental re-working.
I know what does happen. Property taxes go up. A wealth tax by another name.
Capital gains absolutely have tax implications. Just like my house rising $100K in (unrealized) value over a year.
Capital gains receive favorable treatment under US tax code but are also a realized gain by definition. That is you actually have to sell the asset and are taxed based on any profit earned.
An increase in the estimates value of your real estate holdings does not trigger a capital gain. Your municipality, however, may use it as an excuse to increase their assessment of the value of your property, which is used to calculate the tax they charge.
So you admit that many people do pay unrealized gains taxes on their largest asset (their house)?
Yeah it functions like a wealth tax, but the claim was that it was a capital gains tax, which it isn't.
His net worth increased due to asset appreciation. Nobody physically transferred him any money and it can fall back down tomorrow. Should he get a refund if Oracle stock tanks?
He pays less next year because Oracle stock is worth less. Just like property taxes on people's houses.
The math on taxing unrealized gains or losses doesn't work out for the reasons you pointed out. Property taxes, on the other hand, have been working for a long time.
That doesn't answer the question I posed. First off it conflates "high-earning" with "wealthy". Plenty of early career doctors are high earners but have a negative net worth. They pay more taxes than someone with millions in net worth but lower "income".
Secondly, just because the median earner pays a 2% average income tax rate while the top 1% pays on average 21% doesn't tell us anything about its fairness. It ignores income share.
Well, other than it's impossible for the bottom 50% of income earners to ever earn 60% of the income without weird communism in place...
> a pandering move to the mostly financially-illiterate populace
I immediately assumed it was a clear overture to people who are very financially literate and who were expecting within minutes an email from their tax lawyer to explain how payment for their activity happen to quality for a very loose definition of tips. At least the part that wasn’t already tax-free thanks to international montages, blind trusts and creative reporting.
> Singling out certain types of income makes no sense
Actually it makes sense based on what income can be reliably taxed. Impossible to verify how much that person actually tipped, so better write $0 on the tax form. As someone else wrote, that only punishes honest people.
Eh.
People already vastly underreport their tips. This just codifies it in to law. I’m not saying it’s right but I also doubt it’s hitting the IRS’s coffers especially hard.
Logically, it would make sense to me to make it dependent on how much of your income comes from tips. It doesn’t really make sense that wait staff shouldn’t pay taxes on their tips, as it’s basically just their income but paid by third parties. When I was doing wedding photography and someone gave me a tip on top of my normal fee, that feels more like a gift than my income. It was fairly rare and was nowhere near the majority of my income. That, logically, shouldn’t be tipped as long as other gifts aren’t.
But that would be complicated, so here we are.
In my book, asking for a tip is called begging. A tip is voluntary.
> The act also provides that tips do not qualify for the deduction if they are received “in the course of certain specified trades or businesses — including the fields of health, performing arts, and athletics,”
So buskers have to declare their tips, but servers don't?
So I can do a deal for $1 then ask someone to pay the other $100k in tips?
Close, but not really. 25k a year is the limit. So you could do a deal with $1 and $25k per year.
Does the opposite movement exist?
Like "No Tips".
Pay your employees, pay your taxes.
No nonsense on dividing tips between people that I did not interact with, minimum tipping, or with automated machines.
Tipping also means that if I want to know how much I'll spend in your restaurant I will have to decide how much I tip even before I walk in.
This is all just tax evasion with extra steps, enabling exploiting of people that have less contractual power.
I used to try practicing no tips. I live in a state with no different tipping wage. To me that makes the argument of "they get paid nothing" impotent. But, culturally, people will perceive you as a prick for not tipping at restaurants. It's not fair and I don't like it but, that is the culture that has spread from tipping wage states.
Now that I have given up on that battle I do scale my tip for how good the service is.
Is it a state where the minimum wage is no different? Or that they require traditionally tipped wages to actually be paid fairly?
All employees receive minimum wage regardless of whether they receive tips. Tips are not there to backfill the required wages nor can they be used for that. So this isn't the $2.13 min wage that must get to $7.25 when tips are added in.
In my area, the min wage is somewhere around $15/hr. Anything less than 20% tip on top of that $15/hr is considered stingy. The restaurants that do a service charge instead of tipping add 22% and sometimes a 4% fee to pay for employee health insurance.
Anymore, we really only dine out for special occasions or a monthly visit to our favorite spot.
As a statement of how things should be, I agree. But it is not true in most states. When servers are paid the same as the minimum wage there is no separate tipped wage. The words you are looking for in a particular state's labor laws are "tipped wage" or "tip credit". There are many states where the employer can count the expected tips as part of the wage they pay. So, they pay the employee something like $2.13.
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
That’s the same thing.
The minimum wage is often not a fair wage.
If tipped employees are just earning that standard minimum wage and nobody tips them, then they just get the minimum wage. I can see situations where they'd be pretty mad -- there are a lot of restaurants where tipped employees make more than the standard minimum wage.
All of that said, I believe that tipping is horseshit and should go away. But I can't protest it by refusing to tip unless I want to punish the wrong people.
> No nonsense on dividing tips between people that I did not interact with
It is true that in some contexts, a good waiter elevates the experience. But in most restaurants the waiter adds nothing to my experience. If anything they're a hindrance. So I'm very much in favor of forced tip sharing with the people who actually made the food I enjoyed.
> If anything they're a hindrance.
Absolutely. As a brit used to waiters and waitresses in the UK and Europe generally leaving me alone until I ask for something, I find the constant fawning interruptions from American service staff cringe-inducing.
A refreshing aspect of US culture is the lack of a historical class system and associated cultural baggage that we have in the UK. So I find it so strange that once you step into a restaurant you are forced into this weird servant/master cosplay where you dictate the server's livelihood based on how you happen to be feeling that day and the resulting whim of your pen writing on the tip line.
> It is true that in some contexts, a good waiter elevates the experience the food is already marked up at least 300%, take the tip out of that
> Does the opposite movement exist?
Japan?
Most of the world, really.
Japanese people are offended, so don’t do it there. People in other places tend to be flattered, so you can, occasionally. But the idea that you should pay your employees a living wage has been a well established principle since the 19th century.
I've found outside the USA they tend to be confused when I tip. Or they will look me right in the eyes and say, "American, yes?".
I've found that when I go to restaurants outside the U.S. without speaking their native tongue they often ask where I'm from. Answering that you are from the U.S. will make the servers overly friendly and then they will ask for a tip.
You expect us to tip when we visit your country, why can't we expect you to tip when you visit ours?
Servers taking advantage of the tendency for Americans to tip shouldn't be conflated with anyone else traveling to the US.
Sort of, but they chose to outsource instead of paying people/taxes
I use "tipping" in my Hacker News app Hack. Basically users can tip an amount they pick. Would such "no tax on tips" apply to that too?
If it's free for all users, and you don't provide any benefit to those "tipping", it's already an untaxed gift in the US, if no individual gifts more than $19,000, and even then, the gift giver would pay any taxes. Tips require a customer relationship to exist.
No tax on tips is the kind of policy you’d come up with if you were creating a caricature of the far left.
And yet, in today’s America that’s the major economic policy of the leader of the Republican Party.
In what bizzaro world would a far left party want to support the weird American fixation on relying on tipping to ensure a worker makes a decent living?
A actual far left policy would be a collectivised or cooperative workplaces that don't rely on tips to subsidies salaries.
Parent commenter doesn't mean far left globally, but rather far left in America, which is actually centrist globally.
Well, it's a very populist move and the extremes of either party will go down that road to get votes. Far right parties are generally for social programs as long as the wrong people don't get them.
> of the leader of the Republican Party.
You have too much partisanship on your mind.
Harris (Democratic party leader) endorsed it: https://www.cnn.com/2024/08/12/politics/taxes-on-tips-elimin...
That may have been a strategic endorsement, to keep it from becoming a campaign issue.
Correct, she stole a bad idea
Perhaps.
But it also expands the idea that the customer/buyer has financial power over the server by encouraging a tipping culture.
Donald Trump and his sons have repeatedly said that don't pay on contracts when they view the work is poorly done or insufficient, in response to claims of non-payment.
Encouraging tipping makes such "payment discretion" easier.
Two decades back, if you told me someone wanted to dramatically raise tariffs, and have the government take a stake in Intel, I'd have assumed this was someone who labeled themselves a Socialist.
After all, the government taking ownership of industries matches common definitions of Socialism.
In contrast, tariffs and the government taking stakes in private companies reminds me of fascist Italy under Mussolini: https://www.historyfromonestudenttoanother.com/a-level/a-lev...
> Charter of Labour, 1927
> He recognised private enterprises as the most efficient, gaining him support from rich industrialists.
> The charter also stated that the state could take control of, manage or encourage enterprises that were considered inefficient.
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Next you’ll tell me North Korea is a democratic republic!
Socialism isn't just good or bad by default, how it is implemented is what defines its quality and morality.
Socialism isn't "what I like" and "things I don't like aren't socialism", it's a much more generic term.
Even if that were true (it isn't) that's like saying the D in DPRK stands for "Democratic", but using a word doesn't make it true. North Korea is not democratic.
Hell, even back in 1931, people knew the Nazi party was using false branding. You can see it with this anti-Hitler editorial cartoon [0], where Hitler is changing the emphasis of the party-name to schmooze up to different audiences.
Or remember that Night of the Long Knives [1] in 1934, where the Nazis murdered the "socialists."
[0] https://commons.wikimedia.org/wiki/File:Jacobus_Belsen_-_Das...
[1] https://en.wikipedia.org/wiki/Night_of_the_Long_Knives
The world is going to shit and instead of dying with dignity people seek strong leadership and celestial intervention.
It is a tale as old as time.
When the public institutions fail people seek authoritarianism to actually get things done.
While doing so in an awful manner, the current administration is definitely getting things done.
I primarily blame Democrats for the current situation for they have been doing just an awful job of getting anything done or standing up to opposition, they are ineffective cowards and invited the current situation with their incompetence.
> I primarily blame Democrats for the current situation for they have been doing just an awful job of getting anything done or standing up to opposition, they are ineffective cowards and invited the current situation with their incompetence.
I agree with you that Democrats have been ineffective in opposing Republican policies but I think you've come to the wrong conclusion. When someone gets robbed I don't primarily blame them for being ineffective at securing their home, I blame the person who robbed them. Why wouldn't you primarily blame Republicans for pushing bad policies instead of Democrats for being bad at blocking them?
Because we are talking about a nation and a political party covering half the population and not an individual victim of a crime the "don't blame the victim" morality does not apply.
When government is doing a terrible job it loses the consent of the people and gets overthrown, usually by monsters. This is the problem with Democrats, they think they should continue to win, that they deserve to continue to win regardless of how they perform. Because they're right it is morally correct for them to continue winning.
THAT'S NOT HOW THE WORLD WORKS.
It is historically objectively true that governments failing to address the concerns of their people are replaced, usually by authoritarian autocrats. It's a pretty straightforward mechanism.
Democratic leaders in the party corrupted the process to put Hillary Clinton and Joe Biden on the presidential ticket. Democratic leaders in Congress failed to show any leadership, failed to address any problems, failed to stand up or take any sort of action that addressed meaningful problems in this country.
They created the environment for the right to fall off a cliff into extremism.
Instead of defending democracy they sat back and watched.
You've got hundreds of millions of people in this country, extremists are always going to exist. You can't pretend that they don't exist or hope and moralize and blame them for existing when their ideas get popular.
The ideas of the extreme right got popular because the ideas of the center and the left failed to convince enough people.
When my castle falls I'm not blaming the invading army, there's always going to be a new one testing my defenses. I'm blaming the castle guards.
This isn't the case of a poor defenseless victim of a senseless crime. This is the experts who should know better falling asleep at the wheel and intentionally ignoring reality because of their selfishness and stupidity.
From outside the US the view seems more like:
1. Democrats in power could never do anything because Republicans could always block by virtue of having majority somewhere.
2. Republicans blocked everything they could, simply because the Democrats were in power.
3. Democrats then get blamed for not doing anything.
4. the current administration is getting something done, yes. Some things are down the wrong path and shouldn't be done. Some things are debatable but perhaps the right path but doing them in a stupid manner.
PS: supreme court isn't helping.
From outside the US the view looks very different:
1. In 2016 Democrats choose a candidate based solely on internal party politics rather than to win an election, get routed by Trump
2. In 2024 Democrats choose a candidate based solely on internal party politics (letting Biden run) rather than to win an election, get routed by Trump
3. In 2025 Democrats try their best to put up a candidate for New York mayor based on internal party politics rather than to win an election
Gee, wonder what the pattern is here.
> supreme court isn't helping.
Similar patten here. How did the SC end up like this? If the roles were reversed, would R have done the same as D?
> 4. the current administration is getting something done, yes. Some things are down the wrong path and shouldn't be done. Some things are debatable but perhaps the right path but doing them in a stupid manner.
You really believe that if only D currently had a majority somewhere, the current gov wouldn't be doing most of the stuff it's doing?
I mean there was a :
1.5 In 2020 Democrats [did whatever and won the election].
So it's not all bad.
But yes, while my comment didn't go over their faults, the Democrats have plenty of their own too. But being blamed for doing nothing when you don't have the power is hardly their fault.
Ultimately, people in US politics on both sides are playing stupid games and winning stupid prizes.
Even when they had majorities, Democrats didn't get anything done. Didn't do anything to try to prevent what is happening now which was entirely expected. Allowed Republicans to steal a supreme court spot.
In opposition Democrats are utterly failing to prevent the Republican agenda anywhere near the way Republicans prevented the Democratic agenda.
I would say it's embarrassing how badly my party has done but that underrates how I think their incompetence has put an extremely real risk of the republic falling into our imminent future.
>I primarily blame Democrats
For the millionth time:
In the US, our democracy is purposely built to give the minority party almost zero power. If you have less than half the votes in both houses, you can't do anything, full stop.
Go look at how often Democrats have actually won votes. Americans choose not to vote for democrats and then blame them for not having power.
It's ignorance.
Republicans have run this country for 90% of the past 50 years. The public institutions failing have been purposely meant to fail by purposeful sabotage by republican politicians, who openly describe their tactics and publicly boast about "starve the beast", and people STILL blame democrats.
It takes way more time, effort, and public goodwill to build up or reform US government institutions, by design than it takes to tear everything down.
If you are still blaming democrats, you are part of the problem. Blame the politicians who have been voted in, democratically given the reigns of power, and have used that power for 50 or more years to make things worse.
Add to that, republicans have held the majority of State governments for the past 20 years.
It's utterly INSANE the lengths people will go, the stupid rhetorical lies they will tell themselves just to not have to say "The republicans have actively harmed this country for 50 years"
The US system intentionally does not give the minority party any power.
> The Z in Nazi is for "sozialistische" === socialist
No, it's not. Emphatically, demonstrably not.
Ignoring your other stuff about attempting to make the tired "Nazis were socialists, it's in their name, see?" argument, which is just Wolfgang-Pauli-levels of "not even wrong", the "z" in Nazi comes from the German pronunciation of "National".
Yeah, it didn't begin as a shortening, but an insult pun, which is why Hitler banned the term after gaining power.
https://chroniclesmagazine.org/society-culture/the-strange-o...
I might just not be reading correctly, but on the off chance I parsed your comment correctly, I respond to:
> The Z in Nazi is for "sozialistische" === socialist
by pointing out the Nazis were not, in fact socialist. They executed socialists and communists, but called themselves socialist in the same way the DPRK and PROC call themselves republics.
The Nazis and the Communists were different flavors of collective society based governments that put the whole ahead of the individual with a tight control over the thoughts and behaviors of people. Government, business, and industry blended together and you couldn't be in business without sharing the ideology and sharing power with the government.
"not socialism" is nonsense by people who really like socialism, nazism was just a different flavor of socialism and saying otherwise has been part of the propaganda in favor of socialists for a century.
You can be nice and have a socialist society, but it's also a lot easier to have a dictator rise to power in a socialist society because it's easier to hijack the collectivist mindset into a collective with extreme loyalty to an autocrat. You just have to make them angry and afraid.
Reflection: I have never seen upfront a more collectivist mindset than MAGA.
You've now watered down your frankly crazy statement of "Nazis were socialist, actually" to "Nazis and socialists a group of people that make policies to improve the wellbeing of that group". This fits every single other form of governance, outside of anarchy or extreme versions of libertarianism.
There's absolutely no good reason to ever make the statements you've made, outside of trying to make Nazis look better.
I swear to god everybody is just stupid and thinks socialism means "stuff I like"
Nothing you said there is true.
You're the one claiming the Nazis were socialist, which makes you look like a fool at best, and like a liar at worst. A cursory understanding of pre-war politics in German, which you could get from any number of sources, would lay bare how wrong the idea is.
> Were the Nazis socialist? https://www.britannica.com/story/were-the-nazis-socialists
Answer: "No."
> Were the Nazis socialist? https://www.abc.net.au/religion/nazism-socialism-and-the-fal...
Answer: "Any analysis of the electoral platforms, internal party dynamics and political actions of the Nazis between 1921 and 1945 makes this clear [that the Nazis were not socialist]. Perhaps the German Workers Party - the party of around 100 members led by Anton Drexler that preceded the Nazi Party (NSDAP) - might have sought to cobble authoritarian anti-capitalism (which is not the same as socialism) onto biological racism. The early, pre-Nazi party that Hitler joined toyed with forms of market control to benefit small businesses and to halt ostensible "foreign" - that is, Jewish - control over markets. But such dalliances would not last long."
> Were the Nazis socialist? https://www.csun.edu/~vcmth00m/NazismSocialism.html
Answer: "This is standard propaganda for Fox News and the Tea Party. . . . "National Socialism" includes the word "socialism", but it is just a word. Hitler and the Nazis outlawed socialism, and executed socialists and communists en masse, even before they started rounding up Jews. In 1933, the Dachau concentration camp held socialists and leftists exclusively. The Nazis arrested more than 11,000 Germans for "illegal socialist activity" in 1936. . . . In the 1930s and even beyond, nazism, in sharp contrast to socialism, was strongly supported by leading capitalists."
> Were the Nazis socialist? https://www.washingtonpost.com/outlook/2020/02/05/right-need...
"The Nazis hated socialists."
Essentially, the name comes from a few socialists long before Hitler came to power, and the name just stuck even as non-socialists took over (early 30s) and began doing despicable things. It's a bit like saying "Johnson and Johnson is a company comprised of two individuals with the same last name" rather than acknowledging that's just the original name, long before it was rendered inaccurate.
History didn’t begin in 1980. Tariffs and economic interventionism were founding planks of the Lincoln GOP: https://mises.org/mises-daily/awful-truth-about-republicans
Well, the "Lincoln GOP" was also generally in favor of tearing down and burning confederate flags, so I think it makes more sense to compare things over a shorter time-periods like "in living memory."
Parent poster's explicit "two decades back" scale is entirely reasonable for the phenomenon they are pointing out.
Lincoln was concerned about national unity foremost, and allowing the south to preserve its identity facilitated that after the war. It may have been the most successful reconciliation after a bitter civil war ever in history. Regardless, the economic forces shaping the nation have been shifting around but ever present since the founding. We were fighting about a central bank in 1789 and are still fighting about it today!
The Intel story is hilarious considering the whining about Huawei a few years ago.
American hypocrisy never fails.
One or two events do not change big system.
And US still needs to protect x86/MS as best NSA source :) There is even "intel" right in the name ! ;) Also business and best and cheap compute cpus. I guess they need a bit of help until some patents go off...
And do not forget foundry with "photonics" tech cooperating with military...
Lack of wild and dumb capitalism is not automatically socialism.
And belive me: socialism is the TRASH - replacing private ownership destroy value and sensibility of any action.
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It has broad bipartisan support and was one of very few policy changes promised by the Harris Walz campaign.
Conservatives like it, because it is effectively a de minimus exemption on taxes, simplifying the tax collection process, and liberals like it because it results in more progressive taxes, with tip earners overrepresented amongst low-income earners.
It does nothing to simplify the tax code, and it opens up a universe of loopholes. The concept may have some merit, but the implementation is sloppy and lazy.
I think ultimately very few people really care about simplifying the tax code. The cost of a complex tax code is the $19.95-$200 cost of preparing your taxes, which everyone would gladly eat if it meant they could take advantage of tax deductions on pages 1,455, 19,210 and 245,908 of the tax code totaling > the cost of tax prep.
Simplifies tax collection process ≠ Simplifies tax code
A few lines of tax code means millions of people don't have to worry about unpredictable withholdings due to significant changes in tips from day to day, month to month, and year to year.
Also, what's sloppy about it? It's just a deduction for up to a maximum amount from tips, for a specified list of occupations, with the maximum decreasing as income increases above a specified level. That's pretty simple, as far as tax code goes. What do you think would be a less sloppy way of implementing it?
> if you were creating a caricature of the far left
Yes. And a big round of applause to welcome Mr. Zohran Mamdani.
Mamdani has not supported no-tax-on-tips.
And? He's not a caricature of the far left?
Are you reacting purely to the phrase "caricature of the far left" in a way that ignores and even goes against the rest of the post, to bring up a guy you don't like and make no other commentary?
If I'm missing something help me out.
Okay, so if I had some employees working jobs that are part of this, could I give them a tip? Could I give them 25000 dollars of tax free tip.
I think the tip here is defined as customer directly to employees. I'm sure an enterprising tax attorney can come up with ways to help your idea.
As a contractor my customer pays me $2k a day. Instead they could pay me $20 a day and $1800 a day in tips. Everyone wins.
In 14 days, you hit the cap. In 75 days, you start to hit the phase out band.
An employer is an employee’s customer.
https://archive.is/8T9t0
Great, another way companies can offload the responsibility of looking after their staff to the customer.
It sounds like a win for the employee, "ah but you don't need to pay tax on your tips". But in reality it's government saying "The company you work for owes you nothing, take it from the customer".
Oh nice, congrats to all US digital creators.
Nah... "Digital creator" is dream full time job so 25k / y is not so much. So tax still applies :)
of course this administration did something that help sites like only fans.
And Amazon (via Twitch).
i see so much ads there i even forget there's donation
Truly bizarre how this is playing out - was the digital creator carve out requested by the various right wing streamers that are part of Trumps’s core sycophant club? Doesn’t make any sense.
why havent nurses and doctors (ya know, actual life savers) been historically tipped? whats so special about waitresses?
American tipping culture has its origins in the post-Civil-War south:
> Following the Civil War and the abolition of slavery, formerly enslaved Black workers were often relegated to service jobs (e.g., food service workers and railroad porters). However, instead of paying Black workers any wage at all, employers suggested that guests offer Black workers a small tip for their services. Thus, the use of tipping to pay a worker’s base wage, instead of as a bonus on top of employer-paid wages, became an increasingly common practice for service sector employment. In the early 20th century, these employers, who shared a common goal of keeping labor costs down and preventing worker organizing, formed the National Restaurant Association (NRA). Over the past century, the NRA has lobbied Congress to achieve these goals, first by excluding tipped occupations from minimum wage protections entirely, and later by establishing permanent subminimum wages for tipped workers (One Fair Wage 2021).
From https://www.epi.org/publication/rooted-racism-tipping/
Because it encourages corruption. Doctors would prefer to work with patients who tip is not something you want to see.
Even worse example would be "Why can't I tip a police officer? ;)"
doctors and nurses have enough power to demand fixed professional(0) wages that "unskilled labor"(1) does not. no one _wants_ to make $2/hr(2) and to have to rely on the generosity of the general public for a living; in other words, it isn't the waitstaff having special privileges but rather the opposite case of them lacking better protections.
(0) which is to say, much higher (1) a propaganda term if there ever was one. work one shift as a waiter and tell me it take no skill afterwards! (2) $2.13 barring state-level increases over the federal minimum, to satisfy the pedants
so you tip garbage men? you tip macdonalds servers? you tip hospital cleaners? you tip schoolteachers?
I don't know how common it is anymore, but I vaguely remember people tipping their garbage men at Christmas.
In some countries you do.
When my grandpa was in the hospital towards the end of his life, the nurses let him lay in his own piss for half a day before doing anything about it. We gave them an envelope with a generous "tip", and after that they started paying much closer attention to my grandpa.
Many people give a few thousand USD cash to the midwife and the doctor after delivering their baby.
The line between bribing and tipping isn't that thin.
which country is this? you tip all service staff? are you presenting me a logically coherent tipping culture or just another version of the american righteousness?
It's not unheard of for people to give gifts to medical teams after a long course of treatment (at least in the UK).
Service industries have an advantage in being short cycle interactions, so even small amounts of social gratuity can be effectively monetised. There're also much more public so other people can see our generosity / stinginess.
Historically you would pay with cash for your food and sometimes counting change would be awkward so you just round up.
tipping isnt giving someone your spare change is it lol
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"No Tax on Tips" meant for low income taxpayers so most of the major digital creators won't qualify.
Low income digital creators can deduct upto 25k in tips, so if their income from tips and other sources is below $150k a year, their taxable income will be 25k less.
Median single income in the US was around $45,000 in 2024. $150K is not low income. It goes to $300K if filing jointly.
Major creators may still not get much since it's a power law distribution, but the tips thing is in no way limited to low income.
Generally correct, low income digital creators will benefit the most since "No Tax on Tips" will reduce their taxable income by 50% or more in comparison to someone who earns close to 150k which isn't a low income according to BLS as you pointed out.
If you look at tax brackets plus the standard deduction lowering the bracket it affects, it will be a flat or regressive change in take home income amongst the cohort until at $90K or maybe a bit more, double median income, where you can start writing off against the 22% bracket. Assuming 50% tips.
I have no measure of scale on 150k dollars a year in terms of creators scale...
I remember something like 2k$ youtube ad revenue for 1M views, so that's like 1M video every 4 days? or was it 2M views per 1k dollars, then it's 1M video every day?
$1 per 1000 views is a good estimate. Depends wildly on content.
I've seen that same figure for YT ad revenue alone. sponsorships can range from $0.015-0.030 per video for channels with 1k to 50k subscribers.
at a biweekly cadence, they'd need ~6M views per video to hit $150k with ads alone. if you figure another $0.025 per view for sponsorships, then they would need 6M views per year or about 240K per video.
looking at Patreon stats, it seems reasonable to assume that a channel with 25K subscribers could pull in about 1K Patreon subs with effort. if each is paying $5/mo, then that would add another $60K/yr in revenue (though I imagine a lot of that would get eaten up by fees and extra costs.
What's crazy is I just paid $450 to Google for 15k views of my youtube ad (views, not impressions).
So would be $30k for 1M ad views.
Of course a bit apples to oranges since not all youtube videos have mandatory ads, etc.
you don't use adblock?
Love this. Step in the correct direction. Property Taxes are coming under fire next, and given their long racist history, it's about time.
Is it?
Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just?
Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?
It's not about benefitting the employees, but the employers. It's meant to push back against livable wages.
The employers already had all kinds of bizarre tricks to keep tipped workers down.
My girlfriend works for a local chain restaurant. Some of the things she tells me about seem like they shouldn’t be legal (forcing everyone’s cash tips to be pooled with non tipped teenagers they don’t want to pay, for example. Pretty sure the company has had previous class actions against them. This was just a small local chain in a middle/upper middle class suburb.
I saw a post on Nextdoor the other day where another restaurant closed, laying off the workers without paying them for hours worked. The general consensus about how to get the money you worked for: you don’t. The state has no labor board and there was little option for recourse.
Not that I'm a fan of tipping culture or the "creator" economy, but it seems like tips and donations to your favorite youtuber are obviously gifts to me? From irs.gov:
> You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return.
Which is obviously true for tips and donations. If it is a gift, then the giver owes taxes, and there is a $19k/year/recipient exclusion, so small gifts like this would always be exempt.
Progress, not perfection.
Towards what? No taxes at all? That's not desirable if you want things like public schools and rule of law.
And if you want more progressive taxation, then support more progressive taxation. Treating classes of workers differently is not a way to get to more equitable progressive taxation.
Agreed. Why aren’t capital gains taxed at a higher rate than income?
(Please don’t give me bullshit answers based on hundred year old economic theories just because you’re a wanna be libertarian)
>Why aren’t capital gains taxed at a higher rate than income?
The federal capital gains rates are higher than the effective tax rates paid by a family making a median income, but I suspect you are asking why the capital gains rates are not higher than the highest marginal rates.
One issue is simply that capital gains tax rates generally don't account for inflation. If you build a business over a few decades and sell it, much of the increase in value will be simply due to inflation. Do you want to encourage long term investment, or make it so only financially illiterate people do long term investments?
Because rich people earn more from capital gains than income?
I suspect much of the attacks against property taxes aren't to right any historical wrongs, but is part of the attack against public education, since property taxes are a major source of funding.
No. It’s the idea that you’re renting your paid off home from the government. And the government gets to decide what it’s worth.
No, you're renting the physical space -- a scarce part of the commons -- from your community.
(I do think property taxes should be a land-value tax and not include improvements you've built.)
> No, you're renting the physical space -- a scarce part of the commons -- from your community.
Property law in the US and most western democracies doesn’t remotely agree with that. Land is not a communal or solely government owned resource, and the govt doesn’t ‘rent’ it out.
Stop paying your property taxes in the US and see how long it takes before the government forecloses. It is effectively rent under a different name. In exchange the government will protect your property ownership rights so that you don't go on vacation and find someone else now gets to claim your home since you weren't there to stop them.
Note: I think this is a good thing and that property taxes are vital to our local communities well-being.
What is you idea for how to collect revenue for government services? Import taxes?
Ideally: nothing.
Places like that exist. You should try living there, see how you like the quality of life.
I hear Somalia is a wonderful place to live if you've got a lot of money and your own army to defend it.
I can't because people wont leave me alone.
What do you mean? Who is stopping you from moving to Dubai?
I'm a libertarian but I know it is impossible for a society to exist without even just a few taxes.