Tips are not “tax free.” At least not at the state level. I did my son’s taxes when he served and VA doesn’t care if it is hourly wage or tips. It is income and taxed. Quite the shock when he found out he owed money because the state only taxed the hourly wage in his check but the total income on his W-2.
Then none of you have sat at Dennys on Saturday morning with tables packed and dollars piling up on each table..If the customer has 5.00 breakfast ,but likes the waitress he /she will toss in a couple of extra bucks..Maybe the upscale restaurants count everyone’s money,but not all restaurants do it....