Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

It's a broken system but it will never go away since tips are tax-advantaged (there's no sales tax on the tip).

The mental block can be helped a little by adding 1/3rd to all the menu prices as you read them.



Speaking for myself, it is not a mental block, it is disgust with the social design of tip culture. Including tips, waiters are better paid than teachers, and many other more essential professions that require higher qualifications. The pressure is disproportionate to their financial situation. Let's normalize paying everybody what they are worth and do away with the tortuous guilt trips.

To be clear, I am promoting eliminating tips, and paying everybody in the lower 90% of wage earners more for their work. I have no interest in shortchanging waiters.


> tips are tax-advantaged (there's no sales tax on the tip)

Someone please correct me if I'm wrong, but the bigger tax that's avoided here is corporate taxes, I think. The tip goes directly to the employee, and it's thus not taxed as corporate income, is my understanding.

EDIT: Ah, I missed that corporate taxes were on net earnings rather than gross, so this wouldn't make any difference. Thank you!


The primary corporate advantages to tips is they allow the business to display artificially low prices to customers (since they don't include the tip) and pay artificially low wages to employees (tipped jobs have a lower minimum wage).


> tipped jobs have a lower minimum wage

This isnt true in Alaska, California, Minnesota, Montana, Nevada, Oregon, or Washington.

And in the states where it is true, the employee is still required to be paid at least the full minimum wage inclusive of tips.


No wages are deducted so they don't pay income taxes on them anyway.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: