To help lift the tax burden from working America’s shoulders, Dr. Paul has recently introduced the Tax Free Tips Act and, if passed, the bill would exempt tips and gratuities from federal payroll taxes.
“Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client,” stated Dr. Paul from the House floor.
The Texas Congressman criticized the taxation of tips, arguing that the current tax system punishes workers for doing a good job.
It’s about time.
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October 30, 2007 at 7:07 pm |
cpe payroll taxes
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November 23, 2007 at 6:11 pm |
I think exempting tips from federal income tax would be a good idea for another reason, too: the current system is morally corruptive, in that it creates a powerful incentive for waiters to cheat. It penalizes the honest few who report all their tips, and rewards the dishonest majority who report only part of their tips.
It disturbs me to find myself in agreement with Ron Paul. But I guess even he can’t be wrong all the time. “Even a stopped clock is right twice a day.”
-Dave