Is it?
Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just?
Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?
Is it?
Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just?
Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?
It's not about benefitting the employees, but the employers. It's meant to push back against livable wages.
The employers already had all kinds of bizarre tricks to keep tipped workers down.
My girlfriend works for a local chain restaurant. Some of the things she tells me about seem like they shouldn’t be legal (forcing everyone’s cash tips to be pooled with non tipped teenagers they don’t want to pay, for example. Pretty sure the company has had previous class actions against them. This was just a small local chain in a middle/upper middle class suburb.
I saw a post on Nextdoor the other day where another restaurant closed, laying off the workers without paying them for hours worked. The general consensus about how to get the money you worked for: you don’t. The state has no labor board and there was little option for recourse.
Not that I'm a fan of tipping culture or the "creator" economy, but it seems like tips and donations to your favorite youtuber are obviously gifts to me? From irs.gov:
> You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return.
Which is obviously true for tips and donations. If it is a gift, then the giver owes taxes, and there is a $19k/year/recipient exclusion, so small gifts like this would always be exempt.
Progress, not perfection.
Towards what? No taxes at all? That's not desirable if you want things like public schools and rule of law.
And if you want more progressive taxation, then support more progressive taxation. Treating classes of workers differently is not a way to get to more equitable progressive taxation.
Agreed. Why aren’t capital gains taxed at a higher rate than income?
(Please don’t give me bullshit answers based on hundred year old economic theories just because you’re a wanna be libertarian)
>Why aren’t capital gains taxed at a higher rate than income?
The federal capital gains rates are higher than the effective tax rates paid by a family making a median income, but I suspect you are asking why the capital gains rates are not higher than the highest marginal rates.
One issue is simply that capital gains tax rates generally don't account for inflation. If you build a business over a few decades and sell it, much of the increase in value will be simply due to inflation. Do you want to encourage long term investment, or make it so only financially illiterate people do long term investments?
Because rich people earn more from capital gains than income?