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by lotsofpulp
2039 days ago
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The choice in your example is between $4.40 in income or $5 in income, unless I’m missing something. Also, above you wrote that someone that doesn’t tip is being subsidized by those who do tip. Isn’t that the same with evading taxes? Why should certain lower paid jobs have to pay taxes and subsidize those in food service because they have the ability to evade taxes? The incentives get even more screwed up when the tip receivers start advocating against non tipped wages. |
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If I do tip, the person I tip gets $5 and evades paying 60¢ in taxes. If I don’t tip, that person gets $0, and presumably I get to spend that $5 on something else and the taxes will be paid.
> Also, above you wrote that someone that doesn’t tip is being subsidized by those who do tip. Isn’t that the same with evading taxes?
Yes, it is the same, but the numbers are different and the parties who benefit are different.
- If a worker earning tips doesn’t pay 60¢ in taxes, then that’s like the worker being subsidized 60¢ by everyone who does pay taxes.
- If I don’t pay a worker $5 in tips, then that’s like me being subsidized $5 by everyone who does pay tips.
I am fairly certain that the marginal utility of $5 is higher to the person I am tipping than it is to me, and the societal cost is lower, and it’s what’s expected of me. Now, why I don’t just empty my wallet for everybody I see on the street is an entirely different discussion, but the morality of the choice to tip / not tip $5 when that is the expected amount seems pretty cut and dry from where I’m standing.
I’d also say that if I discovered that one of my friends refused to tip service workers, I’d definitely file that information away in my brain as evidence that this “friend” is untrustworthy, of poor moral character, and that I may also risk embarrassment by associating with them.