Forget ‘No Tax on Tips.’ How About No Tips?
Forget ‘No Tax on Tips.’ How About No Tips?
Why do we indulge this nonsensical practice?
When the former president Donald Trump first proposed the program he colloquially refers to as “no tax on tips,” I admit that my mind immediately flashed to a famous scene in the charming 1989 romantic teen comedy Say Anything.
You remember the moment I’m talking about: In trying to persuade glamorous, college-bound Ione Skye to go to a party with him, kickboxing authority John Cusack promises her that he could furnish her with “an enormous amount of tips, many tips, English tips” about England—where Skye will soon be traveling.
Of course, I quickly realized that Trump was not referring to “tips” in the sense of advice, guidance, or counsel but “tips” in reference to unearned wages, extra money, or, more precisely, donations given freely by consumers to workers, especially those in the service and hospitality sectors. Clearly I am out of sync with our tip-oriented culture.
Trump suggested that such voluntary additional payments should not be subject to taxes. Sensing a political winner—or at least an appealing talking point—Vice President Kamala Harris shamelessly appropriated Trump’s proposal.
With fear for our pocketbooks, I dissent.
If tips paid to waiters and waitresses, restaurant workers, hotel clerks, and others in similar occupations are no longer taxed, the pressure to make such allegedly voluntary payments will only increase: If no portion of a given tip ends up with the government, those inclined to pay tips may pony up larger amounts with the confidence that the entirety of their donation is going to their intended recipient.
This regularization and romanticization of tips is sheer folly. To start with, does anyone still believe that tips are noncompulsory and dependent on services rendered? If that were the case, no pizza company would accept tips over the phone—that is to say, tips given before the customer can assess the quality or temperature of the ordered pie, or the promptness, courtesy, and driving skills of the delivery man. I myself have paid pizza tips over the phone simply to avoid scrounging for spare cash, but make no mistake: A tip tendered prior to the receipt of a pizza is no tip at all but is itself more akin to a tax—an extra throwaway payment that is nonetheless essentially mandatory.
We have all seen—and undoubtedly read thinkpieces about—the computer screens in many dining establishments which solicit tips at the time of payment. This, too, is a misunderstanding of the premise upon which tips have historically been given: a tip is meant to be a bonus, a reward, something a little extra. Furthermore, I have encountered these tip-requesting screens in places where tips of any kind have not traditionally been given, such as ice cream parlors and bakeries. Who is even receiving the tip during these encounters? The kid who scooped the sundae, or the kid who rang up the order? The baker in the back, or the boxer of the donuts?
Even in restaurants, where tips are an accepted and acceptable practice, tipping has often been stripped of any meaningful personal element. I would never think of not tipping the waiter or waitress serving my table, someone whom my party has sort of gotten to know over the course of an evening of orders being taken and plates being delivered and then cleared. Yet at a “fast casual” restaurant where I have sometimes placed take-out orders, one of those computer screens solicits tips during payment. If I were to agree to tip under these circumstances, I would be sending my money into a void—since, between placing the order over the phone and walking in to collect the sack of food, I have not really formed a relationship with anyone at all.
The increasingly insistent demands for tips is a reflection of a culture more and more at home with asking for handouts. Take crowdfunding platforms. I don’t deny that such websites have a utility and can meet real needs or emergencies, but the act of otherwise solvent people requesting money from strangers is bizarre. But it’s no more bizarre than employed people, or those who employ them, demanding funds above and beyond their paychecks—that is to say, tips.
Indeed, tipping itself may work to stifle career ambition and advancement. Part of the reason why people strive to find better jobs is that their present pay is not all that great. Bad tips, a lack of tips, and tips that are unfairly taxed may provide the necessary incentive for workers to pound the pavement for a different and better-paying line of work.
Even so, maybe my discomfort with tipping, and my lack of enthusiasm for suspending taxes on tips, is just a matter of resentment: In all my years as a critic and journalist, I’ve never gotten a tip for a perfect turn of phrase. Then again, I’ve never asked for one, either.
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