Taxable Tips
July 17th, 2008
Question: Does anyone else think it is retarded that tips count as taxable income???
Answer: I personally think it's outrageous. It's kind of a punishment if you think about it.
Many people working service industry jobs depend on tips to supplement their already low income.
Ideally tips should only be given when the server earns it.
Tips have become almost mandatory when eating out. Over the years people have been made to feel guilty for not tipping, even if the service was bad.
I'm a really good tipper if my server earns it (which doesn't take much effort). But if I get a really bad server, whether it be because they never checked on me, refilled my coffee, or was just plain rude they're not getting anything extra.
But back to taxes. Taxing hard workers' tips who genuinely earn them by being diligent, polite, and attentive is a roundabout way of punishing productivity. It's kind of like taxing the rich, although the arguments are completely different in that arena.
There's a good chapter about tipping in Glenn Beck's new book.
As far as the politics of taxing tips, Ron Paul is the only 2008 candidate who seems to care about the issue. He even has section of his website devoted to the problem.
http://www.ronpaul2008.com/issues/no-taxes-on-tips/
Hope this helps!
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