\n<\/p>\n
I\u2019m here in Las Vegas for a conference where I just paid $7 for a cup of coffee and then was shamed into tipping another $1 to the server for pouring the coffee and handing it to me. Welcome to America. I feel like I\u2019m tipping for everything, everywhere. And now it\u2019s only going to get worse. And for that I blame President Trump.<\/p>\n
Of course, our tipping culture was in place long before Trump took office. But now that his \u201cno tax on tips\u201d promise became law, our government is officially enabling it. That\u2019s good news for tipped workers and for small-business owners who may feel less pressure to pay higher wages if their workers are getting enough gratuities. But at the same time, it\u2019s bad news for the rest of us who will likely feel even more obligated than ever to tip.<\/p>\n
What\u2019s frustrating is that the tax benefits for tipped workers are not only over-hyped, they\u2019re also temporary. Yes, workers can avoid getting taxed on their tips \u2013 but not all workers (see below) and not all their tips. If you\u2019re eligible, you can deduct up to $25,000 of tip income each year and there are income limitations. Also, you won\u2019t see that benefit until you file your year-end tax returns. You also still have to pay in to social security and Medicare taxes. And it\u2019s estimated that as many as one-third of those employees eligible for this deduction will never use it because their income is so low they don\u2019t pay any federal taxes anyway. Oh, and by the way, the deduction expires in 2028. So enjoy it while it lasts.<\/p>\n
Also irritating is who\u2019s eligible. The treasury department recently published a list of about 50 types of workers who can claim the tipped-wages deduction. Unfortunately, I wasn\u2019t consulted. But if I were, then I would have been a little more particular.<\/p>\n
For example, I would never include \u201cdigital content creators\u201d as eligible tipped workers. Really? Now we\u2019re tipping influencers? Like MrBeast needs more money? Given all the harm that social media has wrought on this world, it\u2019s probably better not to encourage these people with tax incentives.<\/p>\n
I was also surprised to see that electricians, plumbers and locksmiths who work in people\u2019s homes are eligible for tips. These are licensed professionals performing a service. Many are independent contractors or freelancers who are quite capable of coming up with their own fees. And those who are employed aren\u2019t cheap either. I\u2019m not sure where the line is drawn. Should I also be tipping the staff of my accounting firm? My life insurance agent?<\/p>\n
What exactly are \u201cgambling and sports book writers and runners\u201d? Who tips these people? I\u2019m not a prude, but should we be enabling this industry in particular? Can the casinos not afford to pay these people enough?<\/p>\n
I can\u2019t imagine who would tip a private event planner, either. Event planners work for people who have enough money to pay for event planners. It seems silly to give these people a tax benefit for any tips on top of that.<\/p>\n
Finally, why in the world would anyone want to encourage \u201cself-enrichment teachers\u201d with a tax-free tip? I would think the best way to enrich oneself is to pocket your extra money and not further enrich the self-enrichment teacher. What\u2019s next, tipping the guy who mansplains how the infield fly rule works?<\/p>\n
Now that I\u2019ve listed some people who should be dropped from this benefit, it\u2019s only fair to share a few who were unfairly left off. For example:<\/p>\n
Postal workers. Every year we tip our postal worker. She provides a friendly, cheerful, daily service in rain, snow, sleet \u2026 well, you know the rest. Most of my friends do the same.<\/p>\n
Flight attendants. They load bags. They carry babies. They walk around cabins during turbulence. They deal with jerks. And many don\u2019t even start getting paid until the plane leaves the gate!<\/p>\n
School teachers. I don\u2019t understand why everyone wrings their hands over how to improve compensation for our teachers and yet there are no tax incentives for parents to tip them.<\/p>\n
School bus drivers. Them, too.<\/p>\n
Grocery store cashiers. All during Covid, while the rest of us stayed safely at home, watching Netflix and receiving our Amazon packages, the guy who ran the cash register at our local grocery store came in to work every day and did his job. His name is Emilio. Add him to the list, please.<\/p>\n
If it were up to me, we\u2019d be like the rest of the world and ban tips altogether. Instead of incentivizing people to tip, I\u2019d tax tip income higher so employers would be forced to step up and just pay a fair wage. But that\u2019s not reality in 21st-century America. So let\u2019s just make this benefit permanent already instead of playing budgetary games and setting an expiration date near (surprise!) the next presidential election, so it can be a populist rallying point. Let\u2019s also re-visit who is and isn\u2019t eligible.<\/p>\n
My final tip: when in Vegas, make your coffee in your room.<\/p>\n","protected":false},"excerpt":{"rendered":"
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