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Your Take: Tipping, Taxes & Social Norms

Posted By Jim On 06/17/2011 @ 7:10 am In Personal Finance | 20 Comments

What do you think of Ron Paul’s proposal to stop taxing tips [3]? I think servers everyone would love it but it might have some unintended consequences if it were to pass (which it probably won’t). If we were to stop taxing tips, the minimum wage laws would probably have to be adjusted to account for this law and tips would likely go down in the long run (since tips were suppose to supplement a much lower minimum wage).

I’ve personally never liked the idea of tipping because things are so inconsistent and subject to interpretation. The only general rule that has persisted throughout time is that you tip 15% for good service at a restaurant, 20% for great service (which has probably inflated over the decades). Then some restaurants automatically add 18% for large parties, so is 18% the norm or is 15%? What about great service at an inexpensive restaurant? What about at a coffeeshop? Or any number of places with a tip jar? I checked in at a golf course and my receipt had a line for a tip, am I supposed to tip the guy who swiped my card? (I didn’t, nor do I think I need to)

I think it would be great if tip was socially accepted as optional and should be given when service is above and beyond. Servers should get minimum wage, not a BS minimum wage that accounts for tips, and tips should be counted as compensation and taxed as such (and I expect people to fudge their tip numbers, just as they do now).


(Photo: juliejordanscott [4])

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[3] stop taxing tips: http://m.nypost.com/p/news/local/manhattan/raising_glass_to_ron_pnQMYegNe82iIc7oNyuVPK

[4] juliejordanscott: http://www.flickr.com/photos/juliejordanscott/4449481218/sizes/s/in/photostream/

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