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Comment by afavour | Hacker News Reader

IMO it's just bad policy all round without a significantly higher level of detail. For example, how do we classify a tip vs a wage? If we're not very, very specific about it's going to be yet another tax loophole exploited by the rich who will pay each other $1 for work and then 'tip' thousands more.

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.

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I would say this is ridiculous, until I read Snyder v. United States[1,2].

> 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-...

The real kicker in that case is that Snyder claimed the money was payment for services as a consultant to Peterbilt--which would be an obvious and glaring conflict of interest with his duties as mayor. But as far as I can tell this wasn't even considered anywhere--not the Federal prosecutors and not the judges at any level.

I think a difference between a bribe and gratitude is pretty obvious. If the official had prior knowledge that he would receive an award, its a bribe. If he had no reason to expect it before making a decision, it's gratitude.

Or take donations through their charities and use it as a proxy for their own influence.

"gratuities" seems synonymous with paid speaking gigs and book deals.

> For example, how do we classify a tip vs a wage?

Tips are well defined by the IRS, including reporting requirements: https://www.irs.gov/businesses/small-businesses-self-employe...

Supreme Court has decided that the final arbiter on rule making between statutory lines is on the courts now though. IRS can promulgate a regulation like that but anyone can take it to court and get their case ruled on separately.

Courts have always had oversight to some degree. Even when new statutes are written, you don't know if they can be enforced effectively until someone challenges the statute to create precedental case law validating it doesn't violate rights or anything.

From your link:

> 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.

I would much rather see a simplified tax system.

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.

Even not getting into those potential future abuses of the system, there are already some high tip earners such as some exotic dancers (median income $75k). So it wouldn't be helping only low income.

On the other hand, requiring taxes to be paid on something that is really hard to enforce for some segments of the workforce is also bad policy.

IMO there's a need for some nuance here.

thing about tips is I'm sure a large portion of tipped people just pocket the cash & don't report it - missed tax revenue. So if they just say, "pocketing it is legal", what tax revenue was lost? Some, but not as much as say a salaried tax cut.

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