Ron Paul Introduces "The Tax Free Tips Act"

TheDanold

TheDanold

Unimatrix
Ok we all know he likely won't be president, but this bill of his could pass, what are your thoughts on it? Should it pass?

"The Tax Free Tips Act of 2007 H.R. 3664 would exempt tips and gratuities from federal income and payroll taxes. Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client. Since the amount of taxes one pays increases along with the size of tip, taxing tips punishes workers for doing a superior job!

Not only that, but the IRS estimates how much in tips an employee should have received and taxes them based on that, whether they actually received that amount or not. This should stop.

“Many service-sector employers are young people trying to make money to pay for their education, or single parents struggling to provide for their children. Oftentimes, these workers work two jobs in hopes of making a better life for themselves and their families. The Tax Free Tips Act gives these hard-working Americans an immediate pay raise. People may use this pay raise to devote more resources to their children’s, or their own, education, or to save for a home, retirement, or to start their own businesses,” stated Congressman Paul."
http://www.house.gov/paul/press/press2007/pr092707.htm
 
TheDanold said:
Ok we all know he likely won't be president, but this bill of his could pass, what are your thoughts on it? Should it pass?

"The Tax Free Tips Act of 2007 H.R. 3664 would exempt tips and gratuities from federal income and payroll taxes. Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client. Since the amount of taxes one pays increases along with the size of tip, taxing tips punishes workers for doing a superior job!

Not only that, but the IRS estimates how much in tips an employee should have received and taxes them based on that, whether they actually received that amount or not. This should stop.

“Many service-sector employers are young people trying to make money to pay for their education, or single parents struggling to provide for their children. Oftentimes, these workers work two jobs in hopes of making a better life for themselves and their families. The Tax Free Tips Act gives these hard-working Americans an immediate pay raise. People may use this pay raise to devote more resources to their children’s, or their own, education, or to save for a home, retirement, or to start their own businesses,” stated Congressman Paul."
http://www.house.gov/paul/press/press2007/pr092707.htm
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Tips are income and should be taxed as such. I do agree that they should be taxed for the tips that they actually earn though it opens the door to underreporting.
 
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This is what bothers me the most about this:

"Not only that, but the IRS estimates how much in tips an employee should have received and taxes them based on that, whether they actually received that amount or not. This should stop."

If you are a waiter or waitress in a resteraunt in Medina, Oh. You find a 10% tip quite common, people don't tip well in this area. I lived in Canton where 20% was normal, 25% for superior service, and 15% for slow service. 5% for horrible service.

These customers here in Medina leave comment cards saying how great the service was, and leave $2 for a $50 order. That 4%.... and that's not uncommon around here.
 
Yeah fuck those waiters. If they want to earn more money they have to vote Democratic and get the minimum wage up.

Democrats: Helping the working class, as long as it's exactly the way we want.
 
Warren said:
Yeah fuck those waiters. If they want to earn more money they have to vote Democratic and get the minimum wage up.

Democrats: Helping the working class, as long as it's exactly the way we want.
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They are under a seperate set of rules for minumum wage. They only make liek $3.00 an hour..
 
Warren said:
Yeah fuck those waiters. If they want to earn more money they have to vote Democratic and get the minimum wage up.

Democrats: Helping the working class, as long as it's exactly the way we want.
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Umm many in those jobs are exempt fomr the minimum wage acts....
Or their minimum wage is set at a lower level....

Income is income though and should be taxed accordingly.
 
Dungheap said:
I still don't understand why tips are some special category of income that ought not be taxed as income.
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Well for one thing there is Dave's point that the IRS is assuming they make so much in tips. Regular income shows on a check, but tips are not concrete, how can the government ever know what someone receives in tips?
 
Umm reporting the income just like with any other income outside your regular paycheck.
They have forms and stuff for that you know.
 
This is retarded. Tips are income and should be taxed just like my paycheck is taxed.

I'd support this if it was the "Tax Free for Everyone" tax or the "10% flat tax" or something like that.
 
My paycheck is taxed based on an estimate. However when I file it is pretty darned exact and an excess withheld will be refunded or shortpalls paid.
Whatsa difference ?
 
AssHatZombie said:
1. They're already poor as shit and deserve a break.

2. They are taxed based on ESTIMATES. That's bullshit.
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Assuming that all people that work primarily for tips are "poor as shit" is nonsense. Additionally, we already have a progressive tax system that taxes people that are "poor as shit" at lower rates than those that are rich as shit. If you want to promote a system that gives the "poor as shit" more tax breaks then just do that.

I have already agreed that taxing people based on estimates is bullshit and should be dealt with.

So, I still don't see any good reason for treating tips as anything other than ordinary income.
 
I expect the tip taxing is hitting home on Dano somehow. That is the only time republicans show this kind of concern for "the downtrodden"
 
First, how do you expect the government to enforce taxing of tips when most tips are paid with cash? Do you expect every customer to report just how much they gave to the waiter/waitress so that the government can keep its books right? If you suggest that the waiter record the amount somehow, expect them to put something much lower than what actually was received.

You are either going to have to make it incredibly complicated in order to be accurate, or keep it as an estimate which can screw over waiters that don't make as much as another. I'd think it's shitty to assume that all waiters make 15% per plate. It might be better to stick with a low estimate that may seem unreasonable for a tip, but at least they aren't forcing people to pay taxes on something they never earned. The jealousy argument of 'They should pay like I pay', is kind of stupid because they make their money totally differently, and there is no real way of telling what they made.
 
My daughter works for a restaurant in NY City and the wait staff there earn six figures which includes tips, but it is still far from poor. Then you must remember those on the other end of the scale. Their establishments don't have the party where the tips for the server is $3,500.

She is being transferred with this company, and will move from NY to Houston.
I am very excited to see what she thinks of Houston. She is thrilled.
She wants to do well at her new position.
 
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