Is 'No tax on tips' a distraction from the fight to end sub-minimum wages?
theguardian.com
theguardian.com
Sure you’re an engineer on staff now but wouldn’t you want to be a freelancer, paid minimum wage and then a healthy “tip” every two weeks? Win win: I don't pay for benefits, you don’t pay tax.
No tax on tips can be sold as a benefit to the working poor while the small print can be written to favor the rich… no wonder politicians of all stripes are clamouring for it.
> Held: Section 666 proscribes bribes to state and local officials but does not make it a crime for those officials to accept gratuities for their past acts. Pp. 7–16.
1. https://www.supremecourt.gov/opinions/23pdf/23-108_8n5a.pdf.
2. https://www.scotusblog.com/case-files/cases/snyder-v-united-...
Tips are well defined by the IRS, including reporting requirements: https://www.irs.gov/businesses/small-businesses-self-employe...
> Tips include:
> Cash tips received directly from customers.
> Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card or any other electronic payment method.
> The value of any noncash tips, such as tickets or other items of value.
> Tip amounts received from other employees paid out through tip pools, tip splitting, or other formal/informal tip sharing arrangement.
IMO there's a need for some nuance here.
We still have the carried interest loophole. Warren Buffett's secretary is still paying a higher tax rate than him.
There has to be a better solution than this massive tax code that keeps growing year after year.
The American Economoy just cannot support servers given the rise in cost for doing business and changes in consumer behavior due to inflation. Servers will be soon available only in the "nice" restaurants.
Even worse are the coffee shops - if you think getting a coffee is just a few bucks and is relatively cheap, note that you get robbed when you end up tipping. $1 or more tip on a $5 coffee. And there is nothing special you get, the baristas are just doing their basic job. Also the looks you get when you select the option "no tip" or the 0% tip, don't make it worth anything at all.
I stopped going to coffee shops a long time ago.
But if I went daily it'd be like $8/coffee.
Espresso machine at home was the right answer. Pays for itself after only 200 coffees.
This was intentionally designed like this to encourage customers to tip (by making you feel like you have a waiter)
This is the world we live in. Where everyone now feels like they have to give someone extra money just because they showed up to work. Better yet is shitty waiters who have a built in 20% tip. The entire thing pisses me off.
I use to enjoy going to restaurants and would tip easily over 20% because i would get awesome service. Now you are paying that in hopes they don’t spit in your food next time you show up.
I stopped going out to eat because the entire industry is full of assholes now who think they deserve your money. I still follow a lot of people who work in the industry on social media from 5 years ago when i would frequent a lot of nice restaurants. The kind of shit they post is just completely toxic “why are you even coming out to eat if you don’t tip over 20% type crap”.
In many coffee shops they are different people. There is just the person at the register and then there is the person who made my coffee. Who did the tip go too? I would assume it's pooled, but I have no way to know that.
This isn't the case everywhere, there are for sure places that it is the same people (or one place I go to it is a joint effort, it is a super small place with them regularly both shuffling work like one pouring milk while one brew the espresso).
Starbucks has become my goto, because of their app, ubiquity, and consistency. Coffee culture, similar to wine culture is blown out of proportion. I drink an Americano and Starbucks is just fine.
And that's it.
There's no beverage bar, no condiment bar, there MIGHT be napkins, but I can't recall.
You order from the kiosk, which has a cash machine to accept cash, and if its to eat in, grab a table tent and type in the number. Otherwise, you just take the number on the receipt. Eventually someone will bring it out on the other counter without the register and call out your number.
If you're eating in, eventually someone will come to deliver the food -- typically in a bag, just like everything else.
You could order at the counter, but there's no one in sight. You either have to just wait for someone to saunter by or shout out into the void.
Similarly, if you want a refill on your beverage. They'll happily give you one, again, if you can actually track down a worker.
It's quite a sterile experience. At least at the drive through you talk to people.
I understand that its a company wide goal to transition all of the restaurants to this model.
The menu is gigantic, it upsells constantly, the screen is buggy, and the food delivery folks don't use the numbers half the time.
Just like how McDs just raised prices endlessly for the past few years, they've also intentionally turned ordering into an adversarial experience.
I honestly love this. At my local brewery, you just walk in, take a free table, scan the QR code on the table, order & pay (with apple pay), then your beer and food shows up. When you're done, you get up and leave. Multiple people / weird check-splitting? No problem, each party just scans the code separately.
Seattle isn’t the world, it’s not even representative of the USA. Like California they have enacted regulations and policy which resulted in widespread crime and homelessness, the shuttering of small business, and population decline.
The reason you have stuff like robots taking orders or kitchen staff waiting tables isn’t because the progressive utopia has been realized, it’s because there is no such thing as free lunch and those people got fired and kicked to the curb while the remaining employees were forced to do more work.
not only is it a shitty source of income, it also exposes you to sexism, racism and makes you tolerate shit things, because your income could be at risk standing up for yourself.
I'm not saying tips should be banned but there certainly is a "cultural aspect" to tipping...
I used to work food delivery and naturally the customers ordering takeout at fancy restaurants would always tip 0 to the restaurant even if they tipped me for delivery.
I quickly found myself ignored by all the workers at those restaurants, orders take an hour extra to fill, no one talk to me, etc. eventually I learned to tip out of my own tip because my next service is contingent on the prior tip.
And that can only be fixed with legislation.
Let's take police officers in México, for México, for example. One needs to pay bribes to get anything done. On the other hand, they have almost zero job protection, have absolutely crappy salaries, most of the time have to buy their own uniforms, their own gas for the police cars, and so forth. And on top of that, they have to contribute to "upwards bribes", so they can keep their jobs.
It might not be identical to the situation of a water at a café, but jeez, does it rhyme with it.
Tipping should be banned. Waitstaff at a restaurant should be considered like any other employee. Tipping someone because they went "above and beyond" should be considered as an insult, because it's literally a bribe, "I'll give you something extra for your trouble".
Alas, it's a bit too idealistic of me to expect that to happen.
US law actually carved out businesses can "bribe" foreign governments for access to services to entice foreign government worker execute their laws.
Most of the time it's to get them to actually do their job; shitty pay, bad or nonexistent oversight, corruption (or just "bribes") in higher levels too, conditionally applied rules, etc...
That creates a de-facto auction for their time and service, you (and what you're adding on top) vs. everyone else (and what they are adding on top). There's an unofficial "price list" depending on how quick and thorough you want things to be done.
"Tipping culture" easily slides into "bribing culture" when it becomes an expectation, regardless of what the Supreme Court says about it.
No, it is not. Legally, per the SCOTUS, it is definitely not https://en.wikipedia.org/wiki/Snyder_v._United_States
In more egregious instances in food service I saw employees trade goods for tips quid-pro-quo and cut the business entirely out of the transaction.
It should be based on quality of service, or at least on some service being provided, but what has now become the norm is the expectation that you pay a tip (and a hefty percentage one, not just a dollar in the tip jar) just for buying a food item at the counter, with zero service provided.
Based on this, almost everyone using a Stripe/Toast/whatever terminal is accepting a bribe, not a tip.
It's irrelevant if you pay people before or after. You can't tip the police after they perform some sort of service. You're still trying to influence them with money.
But to the point of the person you replied to, on the busy days, there would be two of us working. We were free to split labor however we liked. We made far more tips when it was my attractive, female, coworker taking orders and interacting with the customers, and me scooping, than the other way around. People absolutely do tip differently based on their biases regarding the worker they are interacting with.
And if the answer is no, why not? I’m providing a service after all am I not?
But almost any significant policy or social change will have an impact like that. You have to basically give up on fixing anything if you're not willing to impact anyone.
I'll admit up front that I'm simply not going to see eye-to-eye with anyone who thinks a system is acceptable or sustainable that requires subjugation of many for income maximization for a very few. There's FAR too much capital in play for me to feel bad at slightly less comfort for some if it means drastic reduction in suffering for so many.
It feels degenerate that the government is signalling to us that we should e.g. work in fast food and as a waiter over preschools and child care.
Crypto claims to be a solution to this, but in practice approximately all crypto transactions go through a middleman (exchange) which takes a cut. It's unreasonable to expect your barista to go through the effort of accepting crypto payments without involving an exchange.
Cash doesn't have this problem.
I'd love to be proven wrong about this. Is there a digital payment method that runs on phones that doesn't subsidize a middleman?
Unfortunately, culture in many countries is to tip in certain situations, especially in restaurants, even for normal service. But just because it's culturally normal to tip in restaurants in your country doesn't mean you'd tip a giant corporation like Visa. That's not how culture works.
If the conceit of tips is that they incentivize good service, then tipping before you receive the service is nonsensical.
This culture is socially policed and has nothing to do with service, or whether tips are split, taxed, or whether that part of the country already abolished sub minimum wage
And what am I getting when I'm sitting down? The restaurant should be paying this person to bring me my order just as much as they pay the cashier that rings up the order "standing up".
The whole thing is ridiculous and we're just pandering to a very vocal and particularly nasty minority's opinion (just look at "tipping" subreddits and Facebook pages to see the toxicity, entitled-ness and hostility towards customers).
And because it's unpalatable to say these things, we've all collectively come up with post-rationalizations as to why we should tip and how it'll go horribly if we try address it. "Oh but if you don't tip the employer won't pay them" and endless variations of that and "a ha, but you didn't consider this" gotchas that effectively make this an un-discussible topic.
People worked hard to get some sort of "minimum wage" and then we all collectively allowed tipping (Edit: service worker's that get tips) to be exempt with some sort of "make up for low tips so they get minimum wage anyways" complicated setup that added yet more ways for employers to shaft these "suffering" workers.
The price for food i see includes all costs, ingredients, service and preparation. Only in North america does this weird pressure exist to pay service workers extra, untaxed money.
Generally my rule is 10% tip for bussing and 10% for taking and bringing my order.
I can understand the justification for taxes to be separate, I don't like it, but I get it.
But the 'fuel surcharge' / 'healthcare fee' / ... should be part of your price. How can I compare 2 places if they get to advertise super low prices, only to make it up with self-imposed fees?
The idea of living in a place where the price I see written is not the one I’m going to pay for is so bizarre.
Like it doesn’t make any rational sense given the context I grew up in.
Still, reading this entire discussion is a reminder that societies can be incredibly different even in the most mundane of things like going to get a coffee.
Gary Stevenson is doing hero’s work on this subject and it is the whale in the room for everyone’s financial well-being.
I'm more than fine tipping low waged people who provide an actual service like wait staff and barbers, but the ubiquitous payment terminals taking over for credit card payment, where the cashier/counter staff expect a 10/15/20% or more tip (some now have 20% as the minimum, unless you go "custom") for doing nothing, piss me off!
What next, will tips for supermarket cashiers be next? CVS checkout too?
Whether rational or not, I'm personally fine tipping where the worker is making a low wage, and have spent time personally attending to me. Part of it is thinking that they'll appreciate it more than I will miss it.
Let me return the question: why would you tip a waiter? because they brought your food to your table? isn't that why they should be paid by the restaurant?
Let me also state that, residing in a European city, I do tip my (cheap) barber every time I go because I feel they do an outstanding job at 20% less the price than most competitors, and that work deserves praise in the form of a tip.
In general, it seems to me that a tip should reflect something outstanding. In addition to my cheap barber, I also usually tip at fancy restaurants where the service has proved very, very high above comparables.
Do you also tip your local bike shop or computer store when they sell you a computer or bike that is outstanding and costs 20% less than most competitors? Do you tip your car salesman? Do you tip your bus driver when he/she is 20% faster?
Tipping in the example circumstances I gave isn't typical, but it's something I would consider doing in exceptional circumstances.
What you're upset at is good old fashioned corporate greed.
By and large, huge corporations tend to know that tip prompts annoy people and don't have them.
An overwhelming majority of the egregious tip asks, either for generic not-normally-tipped services, or prompting "25%, 35%, or 45%?", have been small businesses or food carts, especially in tourist-heavy areas.
Corporate greed isn't really part of it, because higher tips for the workers does not make its way to shareholders.
Higher tips for workers absolutely makes its way to shareholders or owners, just not directly. They don't need to pay workers as much, and they will see lower staff turnover.
I find the second point questionable. Firstly, the two options you give are mutually exclusive; either they don't have to pay staff as much, or they will see lower turnover. Lower wages made up for by tips will not decrease turnover if the owner passes that on to themselves via lower wage.
Secondly, and this is a regional thing, but where I live (Oregon) there is no exemption from minimum wage for tipped workers. Workers who make tips must still be paid at least the base minimum wage as everyone else. This puts a hard floor on how low wages can go regardless of tips.
I'll acknowledge that there can be some benefit to owners and shareholders from tips, but I do not think that the tip gouging that has become common benefits a shareholder more than it hurts them via consumer frustration.
During COVID I would tip my normal sitdown restaurant amount for takeout. But not anymore.
True, but the problem really seemed to start when the swivel-to-face-customer POS terminals from Square/etc started to be used - the ones that display these 15/20/25% tip prompts.
I'm trying to think if I've ever seen one of these terminals that doesn't prompt for a tip?!
You can just call any of staffers and make orders, around here, in most casual restaurants. You don't have to wait for your waiter to come back around, the guy carrying that platter of steaming hot lobster has his wireless POS tablet that works for any table and he'd be tsk happy to take your orders because he's paid only by hours and not stealing his colleagues' income by doing so.
In restaurant owner's perspective, it makes waiters way more scalable, easier to overcommit, and also reduces loss of sales from I/O timeouts; any workers can notice empty glasses and collect upsells. To waiters, it gives more stable source of income, which may or may not be plenty, but stability is always nice. To customers, it works like mentioned above.
Isn't this better use of everyone's time?
It's good that more unions are speaking with/to Republicans, but what is really needed is a dedicated workers' party.
For instance it's per workplace and there's a threshold of how much support among the workers you need, etc. It's not just something you join and then you're in a union.
https://en.wikipedia.org/wiki/Union_busting
If you were to organize a union, how would you increase membership while ensuring that management doesn't know that you're organizing a union? You mention online forums and similar but how do you let people know about the forum for the sake of organizing while keeping management out of the loop for the sake of secrecy?
There was this one time at a restaurant where they completely dropped the ball. They brought me a cup of coffee but never came back to take my order, despite me asking. I ended up leaving without eating anything. Of course, I paid for the coffee, but I didn’t leave a tip.
When I mentioned this to some friends who used to work in the service industry, they all said I was the jerk for not tipping. But honestly, I don’t think I was in the wrong.
I visited Australia a while back, and I loved how their bills have a tipping line, but it’s never expected. That’s how it should be everywhere.
Then there would probably be a bunch of sub-bullet points defining whether a tip is taxable depending on whether you have a direct relationship with the customer tipping you, whether the "tip" is mandatory, or at the discretion of the customer, are you in X roles (e.g. barista) within Y industries (e.g. food services).
Also define tips by industry. Service sector. End of story.
I don’t think that saves much in administration costs.
https://www.washingtonpost.com/politics/2024/08/26/trump-tip...
TLDR: Tax on tips is hard to enforce. A lot of it goes unreported. In 2023, the IRS wanted to revamp voluntary enforcement programs, consolidating three voluntary programs into one voluntary program. But they don't plan to move forward with that.
Trump ran an ad saying Kamala wants to "harass" tipped workers and has "weaponized the IRS", and making himself look like the good guy by promising to simply eliminate the tax. Kamala responded with a competing plan but with some modifications. One modification is to make tips exempt from income tax but still subject to payroll tax, allowing workers to get social security benefits when they retire.
So basically, unreported income remains tax evasion. White collar workers paid via tips is tax evasion. Etc
Say you tip your mailman $100 at Christmas or refrigerator deliverer type stuff.
I've never met a service worker who relies on tips that wanted to end the practice. Tips seem to be the entire draw to those types of work in my experience. I've never met a tip worker that was doing it over a wage job they'd rather have, unless it was some type of professional salary type gig like they're going to school to become a nurse or something, and in those cases, they're doing tip work because it enables them to make that happen when no other job really would.
Seems to me like the people fighting for it aren't the people living that way and those fighting are fighting on behalf of people who don't really want their help.
Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4. Then if the employee is underpaid the employer must. Make up the difference. Employees who routinely don’t make full tips are less likely to continue working at the restaurant but you can’t just legally fire them for not making enough tips.
I am sure lots of people have also noticed fast food restaurants pushing for tips for the crew at checkout. This is an industry shift. Same with single owner businesses asking for tips (generally if someone sets their own price a tip shouldn’t be expected, but Square et al made that a normal part of checkout and people now believe it’s necessary). With expected tips getting into the 25-30% territory I wonder if there is an opportunity here for a restaurant chain to advertise itself as “we pay our employees well so you don’t have to”.
This is not true in California, at least. Restaurant workers are paid at least minimum wage (which is $16 or higher depending on locality) and then tips on top. "Tip credit" is not allowed
Rule of thumb, there's _nothing_ in US law where you can say "things vary by state, but they're all the same in way X".
In this case, California has no concept of tip credits. All employees, regardless of whether they receive tips, must be paid at least minimum wage (Currently 16 $/hr)
Having reviewed these laws in all applicable jurisdictions they do follow the same pattern: California’s tip credit is $0 as of right now. Oh and there is the Panera exception to its minimum wage law which is fairly novel.
the value backing the currency is the problem, government is spending too much and your cash is not worth anything
the artificial minimum or maximum you're owed is a hoax and only hurts the economy by preventing people from working if they can't achieve that amount, and by hurting the economy makes you poorer by devaluing your currency, meaning what you're paid will be worth less due to the value of the currency, not its amount
This is just a one-way ratchet on employment costs, not a plausible way to eliminate tipping.
Of course they can: increase prices accordingly (I'm not commenting on what a reasonable wage for serving is, just that tipping is a bad way to get to that wage).
It's not like customers don't have to consider the cost of the mandatory tipping bullshit when you consider where to eat and whether you can afford it in any case.
One of the presidential candidates gave a speech recently with a back drop that said “no taxes on tips” or something.
That did nothing for me in terms of thinking meals would be cheaper. I assume they’re marketing the idea to restaurant workers directly rather than patrons.
And places with enforcement of minumum wages and no tips don't always have higher prices for food.
A very real alternative to your proposal is that market pressure could force prices down and eat into owner's profit. Market forces seem to be what controls the prices most places you can get food with and without tips.
Definitely not visiting that spot ever again.
tax brackets are rediscovered
Sounds like there's already a cap on it.
If we really are going to stick with tips, I think it's fine. Maybe it will fix some of the issues on the workers side temporarily.
But we honestly just need to move away from tipping in the US. Give everyone a livable wage and increase prices slightly. I am already paying 15/20% more thanks to tipping so there is no harm in just increasing the cost of the item, likely less than I am paying now since it would be evenly split between everyone instead of just those that tip.
https://www.npr.org/2024/08/11/nx-s1-5071144/no-tax-on-tips-...
> Trump has been campaigning on the "no tax on tips" policy since June, after a Las Vegas server told him the government was taking too big of a cut from her tipped wages.
Then Harris was forced to match. That’s pretty much it. There’s no economic analysis behind it.
I had a uncle that would tell the wait staff that the cash he handed them was a gift and not a tip (with a wink and a nod).
Also, there's a distinction between people below the poverty line, and young people making little wages in their early jobs. Why shouldn't we tax the rich kid working at McDonald's because their trust fund requires them to work for a decade before they get access to it?
> That's pretty hard to do when the absolute majority of the sum of taxes is paid by poor people. Even if you taxed the rich at 99%, it would be short by orders of magnitude
Source: https://www.ntu.org/foundation/tax-page/who-pays-income-taxe...
The whole thing is a bit disingenuous anyway when so much of tax revenue actually comes from VAT and other indirect taxes.
It's kind-of weird how these levels are set equal nationwide... as there are regions where this is a decent living and one could own a small single family home or condo, an older but reliable car, and eat well on that salary... and places where you would be homeless and have no day to day security or stability required to even keep a job.
I had a decent 2 bedroom apartment, two older but reliable cars I got for nearly free at auto auctions and a fast motorcycle, and cooked my own meals 3x/day from top quality local farmers market ingredients. I'm talking REALLY good food, the best quality fresh local meat and vegetables money can buy, that was the one thing I would not compromise on.
I traveled a lot for fun also, but it was in my own (very fuel efficient) vehicles, cooking for myself on a camp stove while traveling and I could only afford restaurants a few times a year.
Almost all of my possessions like furniture, etc. were high quality things I had slowly sourced for free over craigslist, with some dumpster diving and word of mouth. Mostly high end vintage hardwood stuff that looked expensive- Rich people don't sell that stuff, they give or throw it away.
Personally, I felt like I was living very comfortably, and I quite enjoyed the challenge of living frugally. I felt a bit smug about how I creatively found ways to have pretty nice things, and a nice lifestyle without much cost.
I'll add that nowadays I'm into 'sea foraging' and can jump in the ocean with a mask and a pole spear and eat like a king for free in a few minutes.
However, there are places more affordable than Oregon... I recently looked at home prices in the Mobile, AL area and it looks like you can buy a livable 3 bedroom home for ~$60k there- that could be about $400/mo for a mortgage.
If one has the skills and knowledge to do so, you can still live very cheap on a boat almost anywhere- I know a lot of people with incomes in this range living on well maintained ~30 foot sailboats, even in the SF Bay area.
A lot of what I'm talking about is substituting skills and free time for income. If you are good at DIY stuff, cooking, etc. you can live better for cheap. I only have those skills because I grew up upper middle class, and had parents that taught them to me- and I was in boy scouts, etc. You also have to have a lot of free time- if you're making $14k/year part time with no kids, it's totally different than if you're working full time and have kids- although the minimum deduction and poverty line will be higher with kids.
I have friends that grew up poor with absent parents, and their lives are much more expensive than mine in many ways- they can't maintain an older car so they have to buy a newer one, they can't cook so they eat out more, etc.
The funny thing is that one of the goals of the communist party in the Soviet Union was to abolish all income taxes! Khrushchev even lamented later that they couldn't reach that goal. I suspect many hackers would have loved to be members of the Supreme Soviet, but how would they have reacted when Khrushchev suggested to abolish all income taxes?
What? We did "trickle-down" economics before. Surprisingly enough, it didn't work. At all.
Also, back in the 1950s/60s, we thoroughly soaked the rich and got to go to the moon[0]. Then the 1970s came around and the new gen of wealthies were all "yeah nah, that sucked, let's do something about it!"[1]
[0] in b4 "it's way more complicated than that!!1~"
There's very few of us with a hard enough heart who'd say no to someone who asked for a glass of tap water, or to use the toilet. As a society advances other basic necessities should move into the common domain too. (And the wonderful thing about capitalism is it has driven down the real costs of most of these things to historically absurdly low prices eg a thrift store pants for $7 in the face of $15 minimum wage is cheap compared to history when it was normative to have only 2 sets of clothes)
[1]: I'm thinking like shared bedroom, thrift store clothes, rice + beans + costco, annual checkup + bare minimum health insurance, annual dental cleaning / bare minimum insurance, a mint mobile $15 a month cellphone plan, and a library card for entertainment and education. You're not thriving, and you're not a catastrophic burden on the system either.
Places with more mechanisms to prevent falling into deep poverty and policies to alleviate it have higher wages at the very bottom, and less wealth both in personal net and GDP per capita. But even then it only benefits local workers: they still depend on an immiserated worker underclass somewhere to make their cheap goods.
Capitalism created this problem, and it is a fundamental mechanism in how capitalism creates wealth. It's not within the powers of capitalism to solve it.
A McDonald's cashier is not worth $55,000 just because they are >18 years old. That position is not supposed to be a career. That position is supposed to be a first job for a dumb 16 year old who needs gas money and $500 for a PS5. When their needs outgrow their paycheck, they are supposed to move to a job that pays more. Can McDonalds afford to pay the extra? Sure. But Jimmy's Hotdog Stand down the street can't, so he goes out of business and the money he would have made goes to McDonald's instead and the rich get richer.
Bad businesses that don't create enough value to justify their existence will be forced out of business.
That's a good thing.
I'd go so far as to say we should create laws that err on the side of "slightly favor the little guy" because, as I think we all know, big businesses have armies of lawyers, PR firms, and PACs that bend reality to their whims, whereas little ones mostly do not (though in theory they could band together for the same goal it's unlikely to happen if only for administrative issues).
People that are more price sensitive tip lower and every once in a while a waiter will experience an extremely generous tip. I'm not convinced that forbidding tips would increase net wages paid to servers.
In terms of who is paying, restaurants will simply raise prices to account for higher wages. Their margins aren't that big.
Finally I think tipping definitely incentivizes good service. Its partly cultural, but I've noticed much higher level of service in the US compared to Europe were tips are not expected as much
Does it?
I think for most folks getting lots of tips they find that he tips feel more like they're going to be... whatever they're going to be. Meanwhile their day to day job is more about other things going on, or if the food came out cooked wrong ... not so much something they control like a light-switch enough to make changes.
I'm not sure that incentivizes much at all.
https://www.sciencedirect.com/science/article/pii/S036233199...
From my understanding, poor people are often the best tippers in the USA, and rich folks tend to not tip.
Rich people had a higher than expected number of cheapskates, but on net definitely tipped more.
Might be true, but I don't think that's necessarily a good thing. If someone is forced to be excessively friendly/caring because he/she fears that otherwise he/she might not get enough pay, this is a toxic work culture in my opinion. Also (even though I don't have data on this) it might also create unfair advantages to certain people, for example I think it might be possible that people who are more attractive (especially in restaurants) get payed more. But for the last thing I am just guessing here.
Give waiters minimum wage, split the cost among all sales, and if a server actually goes above and beyond, then I don't think anyone would complain about tipping them extra
My anecdotal experience is the wealthier people are far more likely to tip less.