Ted Cruz Introduces Bill to Exempt Tips From Federal Income Tax

Inheritance tax (on the recipient) makes more sense than income tax does. You actually worked for and earned your income. You just got lucky with your inheritance.

It is technically voluntary, yes, but more and more expected to the point of some places putting it right into the bill without even asking. Tipping culture and expectation is way out of hand.

 

They didn't get "lucky". Their parents worked hard in order to give their kids a better future. Why should the kids be punished for their parents success, AND death? With your phrasing it sounds to me like an envy tax. How does that make more sense than an income tax?

Those places you mention always have a warning that they will do such. Usually posted in the menu and sometimes there will be signs. You can choose to not go there, or get up and leave, if you don't want to tip. But I will agree that the "expectation" on tips is way out of hand.

 

Republicans will never allow this to pass unless it doesn't count as SS income as well

 

The bill was introduced in the Senate, thus the Senate Finance Committee will determine its fate. That fate means it won't vote on it to move it to the general vote in the Senate. If the House introduces a similar bill, it will die in the House Ways and Means Committee as well. This is simply a publicity stunt by Cruz. Nothing more, nothing less. And Trump has received backlash from even republicans on this idea.

 

That is not always the case. There is a saying of old money vs new money. Old money are the mellon family, the Kraft Family, the Rockefeller family and others. With these families, the inheritance tax has been applied and they still have to each time one of the members of that family, especially the patriarch or matriarch of that family passes away. This can also include many farms and ranches that have been in existence for generations.

Then you have new money. This is where the person "worked for it" and were successful, assuming they are beyond the $13.61 threshold. For instance, both Bill Gates and Melinda Gates would probably have a estate tax filed and an estate tax to pay when they pass away, much like Steve Jobs did. But they, like the old money, have those tax attorneys to mitigate and reduce as much as possible what that estate tax might be.

Some do, and some don't. But in either case, tips is not mandatory in this country, but some workers rely on tips for their livelihood. This can include strip joints or other adult entertainment businesses, some professional escort services, restaurant workers, especially waiters/waitresses, and other certain entertainment industries. Even drivers for Lyft, Uber, or the traditional taxicab rely on tips for their livelihood.

 

And the privileged gentry who are happily pocketting the free masters degrees for their kids, and who enjoy tax deductions we aren't utilizing, are crapping bricks over folks who work for tips saving a little on taxes?

Hard to fathom what their problems are.

 

Oh, I doubt the scrooges will control the process much longer. It's much more fitting that Trump signs it into law than Bribed Joe. So, if it dies in the Congress it can always be reintroduced in the next.

First Dems had to give up their slaves,
Then Dems had to give up Jim Crow,
And now Dems have to give up taxing tips.

Progress marches forward!

 

First, gotta say... There are far more "new money" folks out there than "old money". Anyways, why should it matter if its "new money" or "old money"? A death tax is still a death tax. And its a tax based on envy. Its made to redistribute wealth. That is its purpose.

All the ones that make tipping mandatory have to give notice of it by law. So, they all do.

 

Fine, but then they should also not be consider as part of the minimum wage in any way and shouldn't be "suggested", "recommended" or defaulted on menus or bills. The core problem is that lots of people want it to be both ways; One one hand they say tips are perfectly optional bonuses (as they should be) but on the other, they say they're required for staff to make enough to live and for the businesses they work for to survive.

 

Fine by me.

 

Employment that fails to furnish a living wage essentially means taxpayers subsidize those jobs with social programs necessitated by the resulting lack of disposable income on the part of those wage earners.

 

That isn't what this proposed bill is doing though, it's really just supporting and compounding the established flawed system.

Also, you still supported the idea of tips contributing to a minimum wage, with employers only needing to make it up if the tips aren't enough, which is the exact opposite of them being a complete optional bonus or "gift". It's the kind of thing that wouldn't be acceptable in any other context - if an employer gave a employee a performance bonus but then cut their basic pay by the same amount that month, nobody would consider that fair, or even rational.

 

There are a few differences between new money and old money. However, with old money, they have been dealing with the estate tax for several generations, especially when the threshold used to be, prior to 2001 $600. Since then it has steadily increased, which today is $13.61 million. New money folks differ in their approach to how to best mitigate the estate tax. The group that has the hardest time are those farmers whose land value has risen so drastically that the estate tax is inevitable, but that is a small minority compare to all the other wealth out there. But it does make a difference, namely in the attitudes of the person or their circumstance.

Tipping is not mandatory in the US, except for a few instances by the restaurant. We do it as a custom. In some countries, tipping is generally unwelcome or forbidden by law, like Japan or China.

 

Per your own argument, then the bill will not pass this session but next session if Trump is president. And that makes my statement factually correct but somehow you will still disagree.

The main problem is the GOP will probably not allow this. Either the GOP will try to pass and sign the national retail sales tax OR pass the tarriff act to replace the income tax in order to kiss Trump's ring in 2025 if Trump wins the WH.

 

Not really. They want all their money and benefits but not so much for anyone else.

 

They've climbed the ladder, and now they want to pull it up after them and keep everyone else down. It's perverse and sickening that those who have done so well in America, who got their student debt forgiven, who enjoy those COLA perks, would begrudge hard working folks keeping more of their hard earned money.

These are really terrible people, I hate to say it.

 

Fake News, it was your argument that it can't pass this session, to which I accurately pointed out that this session will be over in 6 months and the bill can be reintroduced In the next session. It's a easy point for you to follow, splendid in its simplicity, do try to keep up.

 

Yea, a great idea. Quit taxing income for people who make so little they ain't paying income taxes anyway and make yourself a hero to the little people.

 

Certainly you can understand when people work for tips, they may worker harder and more efficient to earn more money?

Paying them by the hour does nothing to incentivize doing good work. No?

 

So, by that logic, everyone who is salaried is lazy?

I tell you why waiters have to rely on tips for income: Because it shifts the risk form the restaurant owner to the worker. If it's a slow day, the waiters takes the risk of making little money, the owner doesn't have to pay them.

 

The product of the service provided by waiters and waitresses are largely disconnected from the individual who would be responsible for paying their wage. The employer has diminished ability to determine if good service is provided. Most tipped positions are like this.

Most salaried positions include work performance that is directly overseen by those who are responsible for paying their wage.

You simply can't remove the human element from the equation to serve your idealism. Humans are humans. THey are motivated by personal interests, and in most cases money. THat's simply fact.

Not really, because if there is not work to be done many times employees are sent home to reduce unproductive labor costs.

And on busy days, when I waited tables, I would earn over a hundred dollars an hour. More than my boss.

Being in this industry I would be willing to bet that most wait staff prefer the tip model to wage rate model. Well, at least the good ones that make a killing from good service.

Do you disagree?

 

The only way it will pass in the next session, that is a big if, is the GOP controlls the house, senate, and WH. However, it also conflicts with Trump to get rid of the income tax and replace it with a tariff system, which would pretty much be the biggest tax increase of all time. These proposals by Trump are nothing more than dung being thrown at the wall to get him votes.

 

So when Alabama, the country group, was singing 40 Hour Week, they were singing about lazy people?

 

Of Course. Bribed Joe and too many Dems are more than happy to forgive college loans for lawyers and doctors, and they are fine with the Biden Crime Family no paying taxes on their $Millions in bribery income, but suggest that folks working for tips, not pay federal taxes on their tips and suddenly they go ape ****. But you're right, unless the GOP controls Congress and the Presidency, the scrooge Dems will NEVER agree letting hard working folks exclude tips from income for federal taxes.

 

only one person served you. Go eat at a restaurant in other countries. In most of Europe there’s no tipping, and you’ll sit in a full dining room with one server who you’ll see twice, once when you order and again when you get your food. In Israel I often got free deserts because restaurant staff knew Americans tipped.

There’s no economic incentive to provide good service if it’s just hourly. Tipping puts the responsibility on the server to do so.

as for other employees, I was always happy to tip out the bus Mexican working my section. If they do a good job getting tables cleaned and ready to go, we both make more money.

the dim backlash to this is expected. They already hate tipping because getting tips requires working hard. Now the people who do get tips won’t have to pay taxes which puts their food stamps and Medicaid at risk.