A no-tax-on-tips policy would incentivize workers to push harder for more tips, leading businesses to push customers to tip as they shift wage burdens.
As pervasive as things seem now, I have to imagine that it will only get even more pervasive should this pass, indicating a shift in tipping culture.
When those kinds of divides happen, you create enormous incentives for people to game the system, which is a fundamental problem with tax policy.
Knowing that tipped income isn't taxed, people might decide to give a little less money, complicating the dynamics of consumer generosity.
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