Libertarian Tipping: It is real or a meaningless gesture?
So, is this actually accomplish anything? Even according to Reason, it is probably more of a meaningless gesture.
Because the “gift” is obviously intended to be a tip, and not a gift.
By going out of your way to say “taxation is theft” and writing a ZERO in the spot, you are making a political comment which could, and will, be justified by both the employer and the IRS to count the cash gift as taxable. And since there is no record of how much the cash gift was, both will be completely free to guess what it was. You can be sure they will guess on the high side, especially the IRS.
Plus, many resturants will actually penalize an employee who gets a zero tip, so the wait staff will simply take your “gift,” and report it as a tip.
Your attempt to help the wait staff could easily turn into something harmful.
So how can you get around it? After reading a plethora of web sites talking about this, I have some ideas. I am not a tax professional, but after reading what tax professionals said, I came up with this list. If it is wrong, or if corrections are needed, please let me know.
So here’s my list:
- You have to leave an actual tip. Your server must receive a tip that is justified, based on their work. If they did a good job, they should receive a good tip. Period. If you replace the tip with a “gift,” all you have done is waste everyone’s time to make a silly, and painfully illiterate, statement. As an added bonus, your ignorance will make your cause look less legitimate.
- You have to put your gift, in cash, in a sealed envelope, so it is obviously not connected to the payment of your bill and/or the tip. Think of it like this: how would you give your daughter a birthday card and cash gift if she was your waitress? You’d have a sealed envelope with a card and the gift card or cash sealed inside, and her name written on the envelope. Don’t do anything more than that.
- You may put a personal note on the envelope. If you do, make it a simple note gifting the cash to the individual, without making a political comment about it.
— This is a gift, not a political contribution.
— You are not thanking them for their great service — which will turn it into a tip, irrespective of what else you said or did.
— You are not using it to make a political point — which will, once again, make it a tip, irrespective of whatever else you said or did.
— You are giving a blind (cash) gift to a friend. Nothing more; nothing less.
- A politically based card or note should be on a separate piece of paper. This is where you can tell them it is a tax-free gift, etc.
The “Libertarian Tipping” gimick, while it is cute, is something that could easily backfire, and make you and the people you are “trying to help” look like idiots, or even cost them money.
Do it right, or don’t do it at all.