Voting Results Of No Tax on Tips, Overtime and Social Security

Originally posted by: CharlesII

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No tax on tips makes a lot of sense.  The real question is why it makes sense to tax tips.

 

1  You know we haven't always taxed tips, right?  It started in 1982.

2  You can look at it as a gift from patron to service employee for good service rather than normal employment income from an employer.

3  It is a lot of extra work for employees and businesses to account for tips and get it right on government tax witholding and W2s.  Some tips are charged.  Some are cash.  Sime are split.  Employees must keep a daily record.  We trust employees to report the cash, but also assume a minimum collected...even if that's wrong.  Businesses must do annual reports.  There are hundreds of pages of rulings and rules.  I'm for making it simple.  Just let them keep their tips.

 

About Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips | Internal Revenue Service

 

Internal Revenue Bulletin: 2012-26 | Internal Revenue Service

 

Internal Revenue Bulletin: 2012-26 | Internal Revenue Service

 

4  These are generally some of the hardest working and lowest paid people.  Of course they should get to keep all their tip money.  

 

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Originally posted by: Jerry Ice 33

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That makes some sense but #4 then could go towards a lot of folks.  Lawn maintenance, lots of all-cash jobs. 

I think #2 is a false premise.  It is part of their normal employment.  If not, how could places of employment get away with the low hourly rates?  #3 is a major issue.........agreed.   

 

And why OT?  Usually that is income at 1.5x their hourly rate.  Now it is tax-free too?  

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Originally posted by: Kevin Lewis

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Dumb Angry Charles seems to not realize that if you don't make money up to a certain threshold, it isn't taxed at all--and then it is taxed at a low rate until your total pay is beyond the subsistence point. If tipped or OT-earning employees don't make enough, their wages won't be taxed anyway, or they will be taxed modestly. So this Turd nonsense won't help people who are struggling.

 

What it WILL do, though, is give a giant tax break to people who DO earn substantial incomes from tips and/or working OT--and there's nothing to justify that! That cocktail waitress at Caesar's makes more than a bank executive...why should her income (90% tips) be tax-exempt? Why should the guy who pulls an extra shift at the factory be exempt from tax for those hours--especially since he's making $60 per?

 

Charles call tips gifts rather than wages, but that's beside the point. Either is income, and both should be taxed normally.

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Originally posted by: CharlesII

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No tax on tips makes a lot of sense.  The real question is why it makes sense to tax tips.

 

1  You know we haven't always taxed tips, right?  It started in 1982.

2  You can look at it as a gift from patron to service employee for good service rather than normal employment income from an employer.

3  It is a lot of extra work for employees and businesses to account for tips and get it right on government tax witholding and W2s.  Some tips are charged.  Some are cash.  Sime are split.  Employees must keep a daily record.  We trust employees to report the cash, but also assume a minimum collected...even if that's wrong.  Businesses must do annual reports.  There are hundreds of pages of rulings and rules.  I'm for making it simple.  Just let them keep their tips.

 

About Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips | Internal Revenue Service

 

Internal Revenue Bulletin: 2012-26 | Internal Revenue Service

 

Internal Revenue Bulletin: 2012-26 | Internal Revenue Service

 

4  These are generally some of the hardest working and lowest paid people.  Of course they should get to keep all their tip money.  

 

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Originally posted by: Kevin Lewis

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Dumb Angry Charles seems to not realize that if you don't make money up to a certain threshold, it isn't taxed at all--and then it is taxed at a low rate until your total pay is beyond the subsistence point. If tipped or OT-earning employees don't make enough, their wages won't be taxed anyway, or they will be taxed modestly. So this Turd nonsense won't help people who are struggling.

 

What it WILL do, though, is give a giant tax break to people who DO earn substantial incomes from tips and/or working OT--and there's nothing to justify that! That cocktail waitress at Caesar's makes more than a bank executive...why should her income (90% tips) be tax-exempt? Why should the guy who pulls an extra shift at the factory be exempt from tax for those hours--especially since he's making $60 per?

 

Charles call tips gifts rather than wages, but that's beside the point. Either is income, and both should be taxed normally.

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Originally posted by: Inigo Montoya

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You were just calling for not paying taxes at all, or was that in a cocaine and meth fueled evening and you forgot already?

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Originally posted by: Kevin Lewis

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I called for not paying taxes until the Turd is gone. This discussion is about whether tips and OT should be taxed at all. Try to keep up.

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Originally posted by: CharlesII

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1  You know we haven't always taxed tips, right?  It started in 1982.

 

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Originally posted by: Jerry Ice 33

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That makes some sense but #4 then could go towards a lot of folks.  Lawn maintenance, lots of all-cash jobs. 

I think #2 is a false premise.  It is part of their normal employment.  If not, how could places of employment get away with the low hourly rates?  #3 is a major issue.........agreed.   

 

And why OT?  Usually that is income at 1.5x their hourly rate.  Now it is tax-free too?  

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Originally posted by: MaxFlavor

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That's not true. Tip income has been taxable since 1919, but underreported, prompting the 1982 Tax Equity and Fiscal Responsibility Act. 

 

Why Nix a Tip Tax Now? | Tax Notes

 

I'm against not taxing tips or overtime pay, the tax code should be made simpler, not more complex with special carve-outs for certain classes of people.

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