About the proposal to end taxation on tipping

I joined the sub because, like most here, I find the spreading expectation of tips across the United States to be ridiculous. I grew up with restaurant and bar tipping, so I did not find that unusual. In retrospect, I realize even that is ridiculous. Pay people what they demand for their services, charge me what you want, and I'll decide it I want your product.

That said, if tips are not taxed, I will immediately reduce all my tips by 30% or so. That tax break will fall to me.

POTUS is a demagogue and used this to gain an edge in Nevada. He may or may not realize that Economics 101 says that wages will fall back to the level that equalizes after-tax income.

If a job that formerly paid $15/hr after taxes now starts paying $21, it will attract new competition for those jobs. Additional supply of available workers will cause the wage to drop back downto the $15 after taxes.

There may be some dead weight value lost of recaptured in the new regime, but I don't have that analysis in my toolkit.

What will certainly be lost is income to the government.