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No Tax on Tips? [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-06-02

I would REALLY like to know more about

1. Where the “No Tax on Tips” came from.

Most (cash) tips go straight into worker pockets, and are notoriously underreported.

Most service sector workers are so poorly paid, there is really very little Federal income tax liability…..

Is this a way for the National Restaurant Association (the other NRA) to NOT make matching FICA contributions? Tipped workers often find themselves with very low (reported) Social Security earnings when they reach Retirement age, let’s not make that problem worse.

2. What the actual enabling legislation calls for, see above.

IIUC, Automated restaurant accounting programs “assume” (and report) a standard 8% “Tip rate”, based on sales, totaled up by server at the end of a shift. Is this a plot by the NRA to avoid paying FICA (and the worker plus up on the derisory “tipped minimum wage”) in many places?

I eagerly await the wisdom of the crowd.

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[1] Url: https://www.dailykos.com/stories/2025/6/2/2325604/-No-Tax-on-Tips?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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