Interesting article on U.S. Tipping

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Yes, I absolutely disagree with that premise, and your view of what the employee's work is worth is just your assumption starting from quite a different viewpoint than what I and many others have. And it absolutely is a gratuity since no customer is legally obligated to pay it, and the employer is in fact legally obligated to pay any shortfall from the regulator minimum wage. The fact that some customers may feel an obligation to pay is a misunderstanding on the customer's part (or guilt, or virtue signaling, etc.), rather than a real obligation.
Not my "assumption"--it's a reasoned argument, based on the legally sanctioned "tipped employee" rule. You don't have to agree with my reasoning or my conclusion, of course. :)

As for whether it's a "gratuity," a "tip" in the US does not meet the dictionary definition of "gratuity." If it says "gratuity" on the bill, that's a misnomer. I disagree that the customer's feeling of obligation to pay is a misunderstanding on their part. Rather, it's an acknowledgement of the social contract we have created in the US among the employers, their tipped employees, and we the customers. No, it's not a legal obligation; rather, it's something implicit we have created, gradually having morphed into what it is today. But the "tipped employee" rule leads me to my conclusion that it really is more like an obligation or contract than a traditional gratuity.
 
The IRS has nothing to with determining what is considered part of a wage or not, they just want their money.
I shouldn't have said "IRS"; I was referring to minimum wage laws where they have a "tipped employee" minimum wage that's lower than the regular minimum wage. Brain fart, I guess. Sorry for any confusion.
 
Never had to pay any service charge for food in all the restaurants in Thailand that I had been. And I had been to quite a few from far north to deep south.
There are many restaurants in Phuket that has no service charge to pay.
Afraid to catch anything! Are you sure all the employers and their close associate/family in all the places that you had been are fully vaccinated?
Simple approach. If service charge is on the bill, then no tips. Either or, not both. Don’t want to stiff a good service either if tipping is common practice there and the waiters work hard and would appreciate it.

It’s not being afraid of catch anything. It’s a way to minimize the risk. I have been fully vaccinated and boosted (i.e., vaccinated 3 times). I have travelled around the world during Covid more than a dozen times and have been Covid tested about two dozen times. How about you?
 
So it is a tax avoidance scheme: deliberately making it a cash system, so it's harder for the IRS to prove someone has not declared a specific sum....

Yep. Just like Jeff Bezos and Elon Musk and Warren Buffett and people who have kids, and....

USA has adopted "every man for themselves". OK, fine, but that just means everyone needs to have a hustle to make ends meet.
 
Not my "assumption"--it's a reasoned argument, based on the legally sanctioned "tipped employee" rule. You don't have to agree with my reasoning or my conclusion, of course. :)

Rather, it's an acknowledgement of the social contract we have created in the US among the employers, their tipped employees, and we the customers.

I never entered into any such social contract therefore it is invalid. Being asked to enter a contract under duress is also not valid. Show me anywhere on any bill that there is such a social contract that customers have agreed to.
 
But if you're under-paying employees, more or less forcing them to take cash tips to make a living, then you create that tax-evasion environment. Just pay them fully and get rid of the tips and the tax hole is closed. And then you all pay taxes on your income and you get stuff, like social services, healthcare for all, etc.
Don't get me wrong but Netherlands is the capital of tax evasion in Europe. Global corporations pay literally no tax in NL for any digital services sold within EU, and NL benefits from global countries having their headquarters and main investments in your country. This is one of the important drivers of your economy. Your welfare is basically based on stealing from others ;-). I hope as a responsible individual you will take personal initiative electing a government that will change this.
 
Don't get me wrong but Netherlands is the capital of tax evasion in Europe. Global corporations pay literally no tax in NL for any digital services sold within EU, and NL benefits from global countries having their headquarters and main investments in your country. This is one of the important drivers of your economy. Your welfare is basically based on stealing from others ;-). I hope as a responsible individual you will take personal initiative electing a government that will change this.
Improper wording. Netherlands is a country where a lot of tax ELUSION occurs. If you search for tax EVASION, better to watch here in Italy.
Elusion is a way of paying little tax in a fully legal manner, thanks to favourable tax laws in a country, which is called a "fiscal paradise". Many countries worldwide compete in this field, Netherlands is not alone, here in Europe we also have Belgium and Ireland, for example. As the EU community never reached an agreement about aligning the tax policies among participating countries, this is something which must be accepted here in Europe.
On the other side, however, it appears that also in the US some states apply different tax policies than others.
All this applies mostly to large companies. Individual income tax, instead, is enforced quite strictly almost everywhere here in Europe.
As I already explained, what disturbs mostly Europeans when travelling to US is not the fact that service has to be paid separately from the food or drinks being purchased. This is perfectly acceptable.
But we are used to find it listed on the bill, so that it is fiscally traceable, and hence fully reimbursable from the employer. Having to hand some money, possibly by cash, without any tax-deductible receipt, instead, is highly disturbing, because it means that this money will NOT be reimbursed, nor can be exposed as an expense in a tax declaration.
This money given for tips is "lost". Why should I get an economic damage from this strange habit? On the other hand, the idea of leaving the worker unpaid is also quite disturbing: each worker should be paid fairly, I am not happy with the idea of giving no tip for avoiding my personal economic damage, it looks selfish to me. So there is a need for making the tip payment fully traceable, which would make it acceptable also for people coming from other countries.
However I also have this doubt: how can Americans be reimbursed for the tips paid when travelling for work, or how can these expenses be deducted from the income before paying taxes, if no fiscally-traceable receipt is produced? Do not you have the same problems that an untraceable payment causes to Europeans?
 
Improper wording. Netherlands is a country where a lot of tax ELUSION occurs.
Yep you are right. More often used terminology is tax haven. And it is legal, so is tipping. Afaik, in Germany tips are not taxed if you are an employee and tip is honored by the customer/guest.
 
Yep you are right. More often used terminology is tax haven. And it is legal, so is tipping. Afaik, in Germany tips are not taxed if you are an employee and tip is honored by the customer/guest.
Sure, because in Germany (I think in the whole Europe) a tip is a gift, it is not remuneration for your work...
A tip is entirely voluntary, no worker is being underpaid if no tip is given, which is by far the most common case.
I did never suggest that tipping is against the law. It is perfectly lawful everywhere. The problem is that, without a fiscal receipt, tips cannot be refunded, and the percipient can easily evade tax (of course, we should assume that honest workers will pay 100% of the due taxes, if tips are a structural part of their remuneration).
I am disturbed by the fact that, in countries where tip is part of the worker's remuneration, so it is not entirely voluntary, I cannot be reimbursed, and I am also disturbed that the percipient can easily evade tax.
 

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