It's pernicious. I've been to places that add "service charge" by default now to relieve tipping, then still give you the option to tip on top of that, which some people do because they think maybe the service charge isn't going to the server (in the places I've been to, it is). Tipping needs to die and it's frustrating to see it starting to proliferate in some European countries.

Oooh, I like this. Reminds me of charity auctions.

I think the tip here is defined as customer directly to employees. I'm sure an enterprising tax attorney can come up with ways to help your idea.

Don't worry, no tax on tips actually phases out relatively quickly (2028) while the tax cuts enacted for the 1% are there to stay.

edit: fixed year typo

> Singling out certain types of income makes no sense

Actually it makes sense based on what income can be reliably taxed. Impossible to verify how much that person actually tipped, so better write $0 on the tax form. As someone else wrote, that only punishes honest people.

Sort of, but they chose to outsource instead of paying people/taxes

It isn't "no tax on tips" that's regressive, it's tips themselves. If tips are a gift, then they should be taxed as gifts are taxed. End tips and raise wages, and the taxes cease to be confusing or controversial.

For example, half of parents are transferring an average of $1,500/month, tax-free, to their adult children.* Why do they get to do this?

Or to take it to absurdity, why aren't my donations to charities taxed? What's the reason for the carveout? Should I instead donate earmarked cash to a charity that provides assistance to underpaid waitstaff?

[*] If you didn't hear that the other half are getting this, now you know: https://www.savings.com/insights/financial-support-for-adult...

Well, it's a very populist move and the extremes of either party will go down that road to get votes. Far right parties are generally for social programs as long as the wrong people don't get them.

It has broad bipartisan support and was one of very few policy changes promised by the Harris Walz campaign.

Conservatives like it, because it is effectively a de minimus exemption on taxes, simplifying the tax collection process, and liberals like it because it results in more progressive taxes, with tip earners overrepresented amongst low-income earners.

If it's free for all users, and you don't provide any benefit to those "tipping", it's already an untaxed gift in the US, if no individual gifts more than $19,000, and even then, the gift giver would pay any taxes. Tips require a customer relationship to exist.

I have no measure of scale on 150k dollars a year in terms of creators scale...

I remember something like 2k$ youtube ad revenue for 1M views, so that's like 1M video every 4 days? or was it 2M views per 1k dollars, then it's 1M video every day?

Median single income in the US was around $45,000 in 2024. $150K is not low income. It goes to $300K if filing jointly.

Major creators may still not get much since it's a power law distribution, but the tips thing is in no way limited to low income.

Is it?

Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just?

Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?

I suspect much of the attacks against property taxes aren't to right any historical wrongs, but is part of the attack against public education, since property taxes are a major source of funding.

What is you idea for how to collect revenue for government services? Import taxes?