Waitstaff Tipping

     Apparently, waitperson tipping has nothing at all to do with cow tipping, and, really, you'd think that would be clearly spelled out somewhere.  Also, some people have just got no sense of humor.

     But with that little misunderstanding cleared up, dropping the Federal tax on tips started out as one of Donald Trump's talking points and has now been embraced by the Kamala Harris campaign. This is almost predictable, given the amount of time political reporters and candidates spend in diners and coffee shops.  Somewhere between two and three percent of the workforce take part of their income in tips and with both sides on board, the usual rush of contrarian pundits have rushed to calculate the possible lost Federal tax intake and explain why is it either moot or significant, a great idea when their side puts it forward and mere pandering when the other side follows suit.

     I listened to one expert explain that if a waitress is making the same as cashier but losing less of it to the IRS, why, suddenly that cashier's job is less appealing -- and never mind that "cashier" is liable to be an app on a waiter's phone these days, linked to a cash drawer, or that when punching a register is a full-time position, it involves a lot less running around and possibly even a chair, and it tends to pay better.

     But put all that to one side and gather 'round, because not one of these people has figured out what's up.  Back in the old days, before a global pandemic laid a near-knockout punch on dining out, a whole lot of people tipped in cash, even when they paid their bill with plastic.  Remember that stuff?  Billfold sized, mostly-green paper rectangles with pictures of dead Presidents on the front, and similarly-decorated shiny metal rounds that make a happy jingling sound?  You left a stack of 'em at your table, ten percent* of your bill if you're a cheapskate, twenty percent or more if you're not, and it was up to the server to decide if they told Uncle Sam about it or not.

     Flash forward to 2020.  Waitstaff, if they are working at all, are running orders out to cars or even making home deliveries, and nobody wants to touch cash.  Who sneezed on that stuff last?  Yuck.  They're using apps and cards for everything -- including tips.  In 2024, we're sitting down in restaurants more, but we're still getting out a card or reaching for our phone when it comes time to pay, tip and all.

     Those electronic payments leave a paper -- well, digital -- trail.  They show up on the waitress's W-2.  They get taxed.  There's no dodging it, no friendly little oopsie dropping the day's tips into one's pocketbook and heading off to the five-and-dime without first writing it all down for April 15th.

     The change from making tips non-taxable is likely going to be a blip compared to previous years, other than whatever bump it might have taken during the pandemic -- and only "might," since a lot of wait-whatever jobs went all the way away when we were trying to avoid gathering with a bunch of strangers and swapping viruses.  I'm not calling waitpeople tax scofflaws -- most of those jobs pay so little (base rates less than minimum wage in many states) that once they did the math, they were taxed lightly if at all -- but in a cash economy, it's easy to more or less innocently forget to keep track.

     It's nice the candidates and talking heads have something to fuss over that isn't creepy, threatening or a dire crisis, but this one has already burned more in the cost of ink, paper and electricity than it ever gained or loss in Federal taxes.
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* Bear in mind that I'm old and these figures are undoubtedly low.  Tip well, these people are handling your food.