"All cash and non-cash tips an received by an employee are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer."
https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What is and what should be are two different things. Money grabbers like irs want toilet flushes to be taxable.
Trump has the right idea.