TIPS SHOULD NOT BE TAXED.
Did you know that if you work full time, and make twenty dollars in tips a month, that you pay a higher rate of taxes than some rich people pay on their income? That’s because Congress insists that tips are income, and then provides loopholes so the rich can avoid paying taxes.
I got my first dealing job at the Lady Luck Casino in downtown Las Vegas, in 1982. The government’s crusade against tip earners was already underway. Nevada had a 3 person delegation in Congress. Two senators, Howard Cannon and Paul Laxalt, and only one member in the House of Representatives, Jim Santini. They betrayed us. As their millionaire friends got tax breaks, they did nothing as the IRS committed abuses and forced hard working tip earners into bankruptcy. They went from casino to casino auditing the taxes of all dealers who worked there. (Wouldn’t it be nice if they went after the crooks on Wall Street like this?) Today we have a six member delegation in Washington. But nothing has changed, they continue to betray us just like the 3 person delegation did. After inflation, our tips are worth nowhere near what they used to be. Despite that, Congress insists that tips are income, and they demand that the IRS continue their crusade against tip earners. In 2011 Ron Paul introduced the “Tax Free Tip Act,” but no one in Congress supported him.