> many servers don't pay taxes on their tip earnings

This was certainly not the case as recent as 2015-2017 when I was working in restaurants. Most of my coworkers would complain around tax time that we would owe as much as $2000+. Working both in a corporate restaurant and smaller family operated one at the same time, the staff was made to essentially over report your nightly earnings as we had to pay out 20% to the bartenders, kitchen staff.