Excluding gratuities from federal income taxes would be bad news for customers — and perhaps even for tipped workers themselves.
If you left the U.S. for a summer vacation, you may have encountered a strange and refreshing custom: not tipping. Or at least not tipping everyone in sight.
Americans have long been among the world’s most profligate tippers. “We tip more occupations than any other country, and we tend to tip larger amounts than other countries,” says Michael Lynn, a professor of consumer behavior at Cornell University’s School of Hotel Administration whose research focuses on tipping. “We’re kind of the tip-happiest country out there.”
Just wait. American tipping culture is poised to get even more intense. In a rare case of bipartisan agreement, presidential candidates Donald Trump and Kamala Harris both advocate exempting tips from federal income taxes. It’s a popular stance with many potential voters, notably in Nevada, a swing state whose many casino, hotel and restaurant workers rely heavily on tips.
The idea would be bad news for customers — and perhaps even for tipped workers themselves.
Consumers are already weary of the way tip expectations have expanded since the pandemic. As people curbed their restaurant dining to avoid COVID-19, they increased the size of the tips they left, whether for dining in, takeout or delivery. Meanwhile businesses gravitated toward machines for cashless, no-contact transactions.
Soon tip jars that once collected loose change at cash registers morphed into touch screens suggesting significantly larger tip amounts, even for small purchases.
