Starving Server Being Unfairly Taxed

Related Issues:  Labor , Taxation

Tags:  unfair taxing , restaurant employees , tips , tipping

Wednesday, 07/09/2008 @ 05:15 PM PST
To whom it may concern:

I am asking that the government create a new system for the taxing of restaurant employees.  I have been a server now for eight years and I feel that especially recently, with the economy the way it is, I am being unfairly taxed. I am required to claim that I made 10 percent of my sales each day, after I have tipped out to other employees (such as bartenders, bussers, and food runners) 44 percent of my entire tips I have received. So, if I receive a $10 tip, I personally receive only $6 dollars, while my fellow employees receive the other $4.  If my sales (total amount of all my tables itemized charges) for the day were $1000, the government claims that I made $100. This is soley based on the principle that people are tipping at least 14.5% of the check or higher.

The problem is when people tip 10% to start, less, or not at all. After tipping out, this means that I am being taxed on money I do not make. Imagine if other professionals were taxed on paychecks that were higher than what they actually received- there would be an outcry! With the economy suffering, surprisingly, people are still eating out (for there must be a much more substantial crisis for people to give up those kind of luxuries,) they are just not tipping what they should. Some of it is based on the lack of math ability (people have a hard enough time adding their tip to a total, let alone using mulitiplication) and some is based off of forgetting to leave a signed copy with the tip for their server, or on the current economy.

 The worst scenerio is when people tip absolutley nothing, because if their check was $50, then the government says I made $5, when I actually made nothing. Adding these situations up throughout your shift, I am actually paying the government through my taxed paycheck, for money I did not receive. Yes, I am actually losing money by serving these people. I don't know too many people that would like to pay to work. It's absurd. There needs to be a better system for how restaurant employees are taxed and it should not be based on "generally, the public tips servers 15%." If tips are really left up to the customers discretion, than there will be a much larger gap in what a server actually makes. Perhaps a requirement of at least 15% would solve the problem. Than I may not be starving on the whims of a mathmatically challenged, lower- class stereotyped, consistently forgetful, nit-picking public.

Your Constituent,
PCWaitress
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Letter Comments
Total Comments: 33
BennyBoy,  on 07/09/2008 @ 11:31 PM PST  wrote:
I thought this tax law was a little unfair when I first heard about it and I've never been a server. I'm sure the other side of the argument is that if it's left up to the server to be honest about how much in tips that they earned that they will understate how much they made and the govt will lose tax revenue. Anyone have a better idea how to tax servers on the tips they make?
arutkowski02,  on 07/10/2008 @ 08:30 AM PST  wrote:
I've been a waitress and the bottom line is that you should provide the best service you can and if you don't recieve a tip maybe you should think about whether or not you gave the person the service they deserve. If you have a problem with the tipping then find another profession.
PCWaitress,  on 07/10/2008 @ 10:05 AM PST  wrote:
In response to arutkowskio2, and future readers, I tried to make it clear in my letter that there are many situations (not bad service) where I am left no tip. Included are when people leave with the copy of the check (I can't make up what people WOULD have tipped me,) and not included are the "verbal tippers" (those who say "Thank you sooo much, everything was great!" and then leave 10%) or if the kitchen makes a mistake and the guest takes it out on the server. I am the Lead Trainer at my work, and have received awards based on guest compliments. I would prefer in the future to hear solutions and not comments like "maybe you should give better service." It would be silly to demand better tips for bad service.
Maria,  on 07/10/2008 @ 11:00 AM PST  wrote:
This letter makes a great argument on unfair taxation. I'm against any form of taxation that's excessive or unfair. We're all created equal, right? Not according to Uncle Sam.
tinara1977,  on 07/11/2008 @ 07:45 AM PST  wrote:
I am int the same situation. I work as a server part time. There are mant tmes people tip under what they should. People are cheap. They want to go out and eat nice meals, but not tip 10 percent of their bill because the ecomony sucks.
WesSurvey,  on 07/11/2008 @ 12:56 PM PST  wrote:
I have two words for you: Fair Tax. The fair tax is the most research piece of legislation ever. Under the fair tax you pay No Income Tax, and get a rebate on the sales tax you pay for necessities. Sales tax would be about 26%, and if you do the math you would save money by paying this tax on only what you spend rather than everything you earn (or don't earn as indicated in the letter). This would cause the US to be the #1 tax shelter in the world. A significant number of foreign companies would move to the US. How about that for an economic stimulus!?
stewthehermit,  on 07/11/2008 @ 06:04 PM PST  wrote:
I may not fully understand the law, or maybe my state has made coinciding laws but I though business had to ensure you made that 10% if they pay less than minimum wage per hour. Can someone clarify or am I misunderstanding the problem.
edithbx,  on 07/11/2008 @ 08:06 PM PST  wrote:
But you are talking about the money that is taken out, before you file your tax return. Once you file your tax return, you can state what you actually earned, then get any withheld money back.
Shaebutter,  on 07/12/2008 @ 09:36 AM PST  wrote:
Well this is a way for Uncle Sam to control extra income that may have been earned or not. It is unfortunate but as a customer I should be given the choice to tip or not. As a teacher no one tips me for teaching well.
Staceykinz,  on 07/12/2008 @ 03:27 PM PST  wrote:
I imagine the tipping situation has gotten even worse with the higher gas and grocery prices right now. I bet it is becoming awfully tough for servers to make ends meet. Less people eating out, and probably being a little more stingy with tips when they do. Good luck!
dowageremp,  on 07/16/2008 @ 02:36 PM PST  wrote:
Which state do you live in? I work in a restraunt in Indiana, and our waiters are only taxed on the tips that are documented through credit cards/their base salary of $2.35. They're technically supposed to document their cash tips on their taxes, but none of them do.
laulena25,  on 07/17/2008 @ 01:26 PM PST  wrote:
Yeah, this law is very unfair. I used to be a waitress and I feel your pain.
jojodewees,  on 07/17/2008 @ 10:07 PM PST  wrote:
I think the prices should be raised by 15% and cut out the tipping. Then pay everyone a regular wage, not the $2.?? you get per hour plus tips. Servers work hard for that money and it isn't fair to leave up to whether the customer had a good day or a bad day, to decide how much money to pay someone that the government believes made something else. This guideline seriously needs to be looked at.
stlcomputer,  on 07/18/2008 @ 06:04 AM PST  wrote:
I agree the gov goes on an ave. not every one makes the same. But if you pay bus people keep track of what you pay. At the end of the year on your tax return claim it as a business expense. And you will get a refund.
breams44277,  on 07/20/2008 @ 11:04 PM PST  wrote:
I've been a server and I know that, for the most part, servers understate the amount of cash tips they receive. I'm not saying that the 10% tax is fair, perhaps it should be 8%. But it's not realistic to leave the reporting of tips earned to a server, because in all of the years that I waited tables, I did not know one who was honest in their reporting. And, as a former bartender, I know that the servers also would undertip their service staff (bussers, bartenders, etc).
Lindsayu83,  on 07/21/2008 @ 06:45 AM PST  wrote:
servers work very hard for not enough money, and should not be forced to pay taxes on things that they don't actually make. I feel your pain!
dj2sharp,  on 07/21/2008 @ 04:57 PM PST  wrote:
I completely agree with you, and believe the government should only tax a certain percentage for a certain amount earned.
raven831,  on 07/24/2008 @ 05:38 PM PST  wrote:
I totally agree. I have been in the service industry for 8 years and its not like what we do is easy. You people suck so bad and dont even realize it. and we still dont get the tip of having any benefits for your stupidty. blow me....raven831
angelaband,  on 08/04/2008 @ 01:03 PM PST  wrote:
I never thought of this before, but yes we are getting screwed over.
RhodaM,  on 08/09/2008 @ 05:40 PM PST  wrote:
I agree that you are unfairly taxed, but I also think the entire system of tipping is unfair. In essence, the restaurant owners expect the customers to supplement what they should be paying the waiters. Although this allows a lot of waiters to make unheard of amounts of money in a night (not that they don't work hard for it), it places an unfair burden on the customer. Especially when the tipping becomes "mandatory". If the tip is automatically included, the server feels no need to provide good service. And I really resent the way tipping has invaded other forms of service. Tipping used to be an optional, extra, expression of gratitude for "above and beyond" service. Now it's expected for normal, mundane service. The restaurant owners use it as a way to save money on their payroll. It's ridiculous.
BKBS,  on 08/10/2008 @ 04:05 PM PST  wrote:
There needs to be a better system for all servers and bartenders who work off of tips. I have worked as a waitress and believe me most people do not tip 10% if they tip at all. This system of taxing is not fair!
LadyBlueSilver,  on 08/10/2008 @ 07:45 PM PST  wrote:
I used to be a waitress and definitely feel where you're coming from. There aren't many who tip what the government feels they should be. I've had many times where I KNOW I"ve done an excellent job and gotten nothing for my trouble. Not fair that the government says you got something when you didn't.
sla7272,  on 08/18/2008 @ 04:38 PM PST  wrote:
I feel your pain as a former waitress. The scenario is like this: Waitress $3 per hour, Buss $7, and Bar $10 AND we share our tips. Seriously? Taxing on the unknown or the assumed. you know what they about people who assume. I wish you luck many of us have been there and done that.
Zeromus,  on 08/28/2008 @ 03:11 AM PST  wrote:
We live in a nation that has wants the poor and indentured to remain that way. Not saying that you fall under either category.
postmuffin,  on 10/08/2008 @ 06:42 PM PST  wrote:
This system is broken. The restaurant owner expects the customer to pay part of your salary - really all of it. They should just increase the price of the food by 10-15% and pay you a fair salary - that you are taxed on, and tell the customer not to tip. I believe that everyone should pay taxes on money they make - but there's no way to determine exactly what you made. I'm sure it doesn't happen often, but you have probably received a few tips that were more than 50% of the bill. You weren't taxed on these. Then there are people who are very cheap and leave $1. If your employer paid you a proper wage, then you wouldn't have to depend on tips.
temitayo_g,  on 10/10/2008 @ 09:55 AM PST  wrote:
I never thought about it this way, I think I will make it a point of duty to start tipping more.
KateB,  on 11/16/2008 @ 08:01 PM PST  wrote:
It's absolutely absurd that the tax system is based upon assumptions of earnings. What if you choose to work in a depressed economy? Of wait that's anywhere in the CONUS.
stephanne1017,  on 11/30/2008 @ 09:06 PM PST  wrote:
Servers should be taxed only on what they actually get to take home. I was a server and the only things that you can control are the attitude you have with the customers, making sure you get their orders right, and making sure their glasses are never empty. Servers should not be penalized for the kitchen making the food wrong but the harsh reality is that there aren't many people who realize that when making their decision on how much of a tip to leave. Hopefully things will change in the future.
Nlibrarian,  on 12/02/2008 @ 01:59 PM PST  wrote:
I think you have all the servers that have underestimated their tips to thank for this. I would suggest getting a job at a place with more consistent tips.
HeartHope,  on 12/02/2008 @ 08:20 PM PST  wrote:
This is terrible! I agree with you completely. And I always - ALWAYS tip over 20%. : ) You deserve better than what you are getting. Life is hard enough... (It's easy folks - just take 10% and multiply it by 2!)
seanmcd,  on 12/26/2008 @ 03:15 PM PST  wrote:
Strong letter - presents numbers and quantifiable facts in the context of a moving personal story, then urges specific action. Very likely to get a response.
jkskradski,  on 02/08/2009 @ 02:58 PM PST  wrote:
I do not think that the service industry should get taxed on tips. I completely hear your point. And now that the economy is difficult to say the least, people are not tipping. I think that is rediculous that you are being taxed for something that you didn't make..... on the flip side, your restaurant is in control of what you must claim. They do get a tax writeoff for all taxes of their employees.
cplperry,  on 06/10/2009 @ 12:02 PM PST  wrote:
Every time minimum wage goes up, servers are being taxed on more but not making anymore. Certain restaurants certainly bring better tips for servers than others regardless of the quality of service. I waited tables in the early nineties for the same company I manage for now and I made more money then than my waitresses do now. The business just isn't there and we are required to have a certain number of wait staff based on seats instead of business; if there are no customers, there can be no tips and this company will fire people if they claim too much tip premium(the difference in what they make and minimum wage). They claim the servers are not doing their job properly or they would be making enough tips but the truth is the customers just aren't there. I do not like this company but had to come back to work here when my former employer sold his company. Nothing much available in my area right now.