[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.

[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.