Taxing Tips
I’m not a big fan of the concept of tips…adding a percentage or an amount to your bill, typically at a restaurant if the experience was good. Some places pool all the tips for a shift and divide them among multiple staff members, others allow servers to keep all the tip if it’s cash but not if it’s on a credit card, etc. I do tip pretty generously, since the wage for those jobs is low because of tips, but I’m not a fan of the concept.
Those tips are taxable income, although it is probably one of the least accurately reported income segments. So if you leave a few dollars for the server at a coffee shop, that server is supposed to keep track through the year, report that total as income, and pay taxes on it…as if the federal government isn’t already taking enough of our money.
Recently on the campaign trail, Donald Trump proposed eliminating federal income tax on tips. Cynics say he only came up with that to secure votes in Nevada, which depends heavily on hospitality workers. But no matter, it’s a good idea to simplify the process for those typically on the lower end of the wage scale.
Syndicated radio host, TV host, and author Wayne Allyn Root has started a grassroots effort to take that further. He’s suggesting that when you add the tip to the credit card receipt, add something else: the phrase, “No Tax on Tips…Vote for Trump” or something similar.
In a short time, the effort has caught on…with folks not only writing it on the slip, but posting photos of it on social media as a broader reminder.
Obviously the server who sees the “No Tax on Tips” statement may be favorably impressed…but the social media posts take it to the next level.
So for those who ask what they can do…well, there’s something. Because as with tips, every little bit helps.
