So you think your 20% tip should only be left in cash, rather than added onto a credit card? Maybe you’re right. But hopefully you realize this act of seeming generosity is thoroughly unpatriotic.
Allow me a story to wet your appetite. About six months ago—shortly before COVID made these experiences rare—a woman late in her 7th decade and a handsome lad of 39 years (that’s me) were at a restaurant. We both ordered the very same breakfast, save the preparation of the eggs. Doesn’t matter. Anyway, when our bananas Foster pancakes arrived, she was presented with a stack topped with 8 yellow slices. Mine had a measly 4. And, no, it wasn’t 4 thick slices of banana and 8 thin slices; she straight-up had twice the fruit!
I see 3 possible scenarios playing out here. 1) The waitress was showing favoritism. 2) She didn’t notice the nanner discrepancy, hinting at her job inadequacy. 3) The cook did this on purpose to piss off a patron, decreasing the servers’ tip, adding fire to some ongoing feud. So now that I made my point perfectly clear, I can—. What? Oh, you don’t see what I’m getting at. Sorry, thought it was clear. Here’s the point: it’s been annoying me for 6 months and I wanted to get it off my chest.
And why is 20% the new 15%?! When I was young, the standard tip was 15% unless there was exceptional service. In that case, a 20% tip would signify a job extraordinarily well done. Now 15% shows you as a cheap-ass, 20% is perceived as closer to standard, and even 25% may not be interpreted with the expression of “Great job” it once screamed. Where will it end? Tips aren’t exactly seen as optional these days, either. Just include the tip in the cost of the food and be done with it.
Since that doesn’t seem likely to be widely adopted, maybe I should finally get to my point. I’ve heard the argument made that all tips should be given in cash so that the recipient need not claim all their income on their taxes like they’d be forced to if the tip was given on a credit card. Anyone who’s read my argument Deadbeat or Dumbass will know how I feel about paying cash for anything. But giving a cash tip for the express reason to decrease your servers’ tax burden is all kinds of wrong. I mean, sure, it’s perfectly fine for some random billionaire to pay only $750 in federal income tax. But a normal, everyday, run-of-the-mill taxpayer trying to save a couple hundred bucks a year . . . unacceptable.
I would really like for there to still be Social Security when I’m eligible in 25 years. I also quite enjoy the protection afforded this country by our mighty military. I’d love to continue the exploration of our solar system, benefiting from all the knowledge NASA garners from that investment. All these services, and so many others, rely at least in part on income taxes. You may think $10.00 not taxed is fine, nothing to worry about, won’t make any difference.
Let’s have a little math session, just for funsies. It was estimated that $863 billion was spent at restaurants in 2019. Let’s conservatively assume about half of that was at restaurants where tips are expected. A 20% tip on $432 billion is around $86 billion. Taxed at an average rate of 15% leaves about $13 billion, or about 0.4 % of that year’s federal tax revenue. Not a huge number when compared to some of the figures thrown around by the government, but it would account for about ⅔ of NASA’s budget.
In fact, I’ll go as far as argue that tipping in cash is equivalent to complicity in tax evasion. Taxes that would have been earmarked to help fellow Americans in their retirements; committed to keep our country’s military strong, fed, and quartered; or enhanced Earth’s protection from any number of inter- and extraplanetary threats. All so that your waitress can keep an extra $1.50 from your $10.00 tip. Selfish. Unpatriotic. Criminal.
Similarly, restaurants themselves walk a fine line by allowing cash tips and permitting employee to finagle their taxes. They, too, should be held complicit in tax evasion. All this would be made moot if optional gratuity were replaced with service charges that are added to the server’s paycheck, thus automatically taxed. The law states that to be considered a tip, the customer must not be forced to give the money, must be able to choose the amount, and must be able to determine who receives it. I’m sure you’ve seen a menu reading “An 18% charge will be added to all bills for parties of 6 or more customers.” In these cases, the 18% is legally considered a service charge rather than a tip because it’s mandatory and fixed. Incorporating a universal “gratuity” to the price of the food would negate the possibility of tax avoidance.
Like I said—not likely to be widely adopted. But if you ever want one of those service charges removed from your bill, I’ve heard you can talk to a manager. Just cite banana disparity as alleged sexism, ageism (or some other random –ism). Then you can leave whatever tip you desire so the waiter won’t have to claim it on his—. Wait a minute! What am I doing? Why am I giving you ideas? I don’t want you fined or imprisoned for the probably imagined crime of conspiracy to commit tax-evasion. I don’t know if it’s really a law, but I’m sure as hell not Googling it. I don’t want audited.
So you still believe the culturally mandated 20% tip is best paid out in cash? So much federal tax money is misspent, wasted, or not collected to begin with. There are tax loopholes allowing Fortune 500 companies netting billions of dollars a year to pay little to no federal taxes. Some of these companies are later bailed out with the very tax dollars they managed to eschew. They benefit from the hundreds or thousands of tax dollars paid by every hard working waitress, overworked home health care aide, and underpaid military serviceman. What’s good for the billionaire goose is good for the paycheck-to-paycheck gander. So, I guess, yeah, come to think of it . . . You’re Probably Right.
[013] October 7, 2020