Pay your employees a living wage
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[–] 3 points 2 months ago (3 children)

Mostly correct. You do have to pay taxes on tips that the government knows about, which means any credit card tips and reported cash tips (which can be lied about of course because there's no paper trail, but reporting $0 cash tips is highly suspicious).

Remember the whole "no taxes on tips" campaign that MAGA tried to use to get more working folks on their side? That's because much/most tips are taxed.

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  • [–] 4 points 2 months ago* (last edited 2 months ago) (1 child)

    And as someone who's spent much of my career in a tipped position, all tips should be taxed. All income should be taxed. It's what keeps society working.

    Now, anyone in a tipped position should be taxed less, but we shouldn't be targeting the source of the income. Take two people; a server making $60k and a teacher making $60k. Both should be taxed less than they currently are (and billionaires taxed much much much more), but saying the server should pay less than the teacher because much of their income is tips is prioritizing the wrong thing in society. Eliminating tax on tips is wrong when the republicans proposed it, and it was wrong when democrats agreed. Lower the tax burden on lower brackets, and raise it on those in the much higher brackets. Don't target the source of the income.

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  • [–] 3 points 2 months ago

    Oh I understand, but the no tax on tips thing did go through. Through 2028 you can deduct up to $25k in tips. You still have to pay payroll taxes, but you will get them back when you do your taxes.

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