“I see voluntary tips as gifts, which should never be taxed.“
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I do too which is why I always tip in cash and pay the bill with a card. Having family members who work for tips I’m familiar with the games employers can play with “on-the-record” tips such as pooling and diverting substantial amounts to kitchen staff.
The biggest downside I see from Trump’s proposal would be IF the tip income would no longer be credited for Social Security purposes. In other words ideally exclude it from INCOME TAXATION while maintaining it under SOCIAL SECURITY CONTRIBUTION coverage.
Gifts should never count toward Social Security.
While the employee pays FICA and medicare tax on tips, a large part of tips are not subject to the employer portion of the FICA and Medicare tax.
“The biggest downside I see from Trump’s proposal would be IF the tip income would no longer be credited for Social Security purposes. In other words ideally exclude it from INCOME TAXATION while maintaining it under SOCIAL SECURITY CONTRIBUTION coverage.”
Many states run investment systems to pay government pensions.
People might be allowed to provide for their retirement via their state pension investment system.