Ted Cruz Puts Trump's Tax Idea Into Bill Form, Quickly Gets Support from Fellow Republicans

Western Journal ^ | 21 June 2024 | Jack Davis

[NFHale]

These things need to be ready to go on Day One and get rammed through.

[Brown Deer]

No similarity, bonuses come from your employer. Tips come directly from your customer.

[kosciusko51]

That’s a fair point.

[light-bulb]

If you work for a company, do you know that your employer only pays taxes on profit?
For example - Hypothetically you are an HVAC guy. You have a customer who purchased a new AC, you installed and delivered it. Your customer paid your company $20k. Your employer deducts the cost of the product, shipping, mileage, insurance, all employee costs, facility etc. They then may pay taxes on say 2k in profit. The customer already paid taxes on their money so now the government gets to re-tax on 2k of profit.
However for tips from a person to a person, there is very little deduction. So you collect $4k in cash tips, which is already likely been taxed on the customer side, and now the cash is re-taxed again, almost in it’s entirety. It’s horrible from an overall tax perspective because it is just one example of how broken our taxation system is.

[Jonny7797]

“Income tax paying voters should be pissed about this. I am.”

I wouldnt say I’m pissed but Trump is playing the same game Democrats play, giveaways in exchange for votes. It’s BS.

Lower taxes for all to unleash the economy should be the mantra.

[moovova]

I didn’t know that. Thanks.

[Svartalfiar]

To make $3 an hour and get taxed on an assumed $10 an hour is just wrong.

Huh? How/where could this ever happen?

[Svartalfiar]

And tips shouldn’t be split between all the workers. That’s the purpose of a tip...to reward the particular person who takes care of you.

And that person couldn't have given you good service if the busboy didn't clean your table first. If the bartender didn't mix your drink quick and just right. If the cook didn't handle your stupid complicated order correctly, despite the waiter's Doctor-level handwriting. Most waitstaff I've known have no problem with sharing tips.

[Trailerpark Badass]

Yep, 20 years in the hospitality industry. Servers are happy to tip-out for good work

[Svartalfiar]

Cuz they don’t get minimum wage.

Yes they do. If not, they get more!

[Svartalfiar]

They then may pay taxes on say 2k in profit. The customer already paid taxes on their money so now the government gets to re-tax on 2k of profit.

If the government couldn't tax dollars that were 'taxed previously', tax revenue would go to zero. Every single dollar goes back at some point to someone getting taxed on it. All those business expenses that hvac company subtracted from their income, gets taxed when they paid the install guy, or the profit at the company they bought parts from. Which then repeats back and back and back.

Unless it'sfresh off the press, every dollar has likely been taxed at tens or hundreds of times its face value over its life.

[SunkenCiv]

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[Oil Object Insp]

Same rational should be extended to overtime.

People work 40+ hours of overtime, and they should see 100% of that money. It should be exempt from ALL tax, federal, state and local.

[light-bulb]

You maybe missing the part that it’s a transaction between two people, it is a TIP, not a payment to a company, or for a service, it is a thank you, or you could even call it a Gift.

Each year I am allowed to gift money up to 18k to any person I choose and guess what, they do not pay taxes on the gift. Why then is it different for those who rely on tips.

Again, our tax system is so completely horrendous, it is appalling the more you know of it. It is weaponized when convenient, it is leveraged for compliance, it is literally impossible by design to not break in some way. Lots of Atlas Shrugged quotes come to my mind here.

[9YearLurker]

Awful.

[NCLaw441]

Tips and bonuses are presently taxable because they are payment for work well done. Neither are gifts because, according to a court case whose name I have forgotten forty years after law school, the money is not given with “detached and disinterested generosity.” You only give tips to those who have served you. Now, if you go into a restaurant, for example, and give every server $100, those would be gifts and not income. But that is not how it works. Trump’s proposal not to tax that income, is politically brilliant.

[NCLaw441]

* I wonder if anyone has made the argument that tips are gifts not income.*. Yes, that argument was shot down by the courts 40 plus years ago.