[dataflow]

> tips are tax-advantaged (there's no sales tax on the tip)

Someone please correct me if I'm wrong, but the bigger tax that's avoided here is corporate taxes, I think. The tip goes directly to the employee, and it's thus not taxed as corporate income, is my understanding.

EDIT: Ah, I missed that corporate taxes were on net earnings rather than gross, so this wouldn't make any difference. Thank you!

[atmavatar]

The primary corporate advantages to tips is they allow the business to display artificially low prices to customers (since they don't include the tip) and pay artificially low wages to employees (tipped jobs have a lower minimum wage).

[ac29]

> tipped jobs have a lower minimum wage

This isnt true in Alaska, California, Minnesota, Montana, Nevada, Oregon, or Washington.

And in the states where it is true, the employee is still required to be paid at least the full minimum wage inclusive of tips.

[hattmall]

No wages are deducted so they don't pay income taxes on them anyway.