As for no tax on tips, perhaps just exempt the physical money share.
As a CPA that has represented many restaurants in IRS audits over the years, the “No Tax on Tips” is wide open to abuse.
Most restaurants use the tips added to paid wages to meet the state and Federal minimum wage requirements.
Keep in mind that most tips are on credit cards where the employer pays for credit card processing fees and must pay the tips to the employee.
Do tips then not count toward Social Security earnings?
For unemployment and workman’s comp?
Can owners of restaurants get tax free tips if they wait on tables? Many do this especially in small mom and pop restaurants.
What about large groups where the gratuity is added automatically?
What about non restaurant tipped employees? My tax prep fee is $5. Thank you for the $400 tip. 😁
I feel this is wide open to abuse and unconsidered consequences.