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<v Speaker 1>Let's say good morning now to the host of How

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<v Speaker 1>to Money on KFI every Sunday.

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<v Speaker 2>It's Joel Larsgard.

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<v Speaker 3>Morning, Joel, Morning Amy. Uh.

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<v Speaker 1>We have been talking about the Big Beautiful Bill that

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<v Speaker 1>includes no taxes on tips, and so we wanted to

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<v Speaker 1>dig into that a little bit and find out one

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<v Speaker 1>if you think that's a good idea, and then talk

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<v Speaker 1>about tipping in general, because it's really well, it ticks

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<v Speaker 1>me off.

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<v Speaker 3>Yeah, the Big Beautiful Bill, there's still like, you know,

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<v Speaker 3>how's it going to shake out, And there's a lot

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<v Speaker 3>of stuff in it to kind of parse through, and

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<v Speaker 3>it's going to impact all of our personal finances based

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<v Speaker 3>on you know, how things actually shake out in the end.

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<v Speaker 3>And the no tax on tips is one of the

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<v Speaker 3>most interesting things to me. And it was a proposal

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<v Speaker 3>that seemed like it was kind of by the seat

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<v Speaker 3>of the pants, you know, spur of the moment sort

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<v Speaker 3>of thought from President Trump on the when he was campaigning.

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<v Speaker 3>And then you remember, if if you remember correctly, the

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<v Speaker 3>Kamala Harris campaign. Yeah, they're like, yeah, we think it

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<v Speaker 3>is a great idea too, and so it's like a

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<v Speaker 3>political as a political tool, it makes sense, right, You're

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<v Speaker 3>catering to a certain voter class. As a actual policy

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<v Speaker 3>being implemented, I think there's a whole bunch of opportunity

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<v Speaker 3>to really like swing and miss, and so I don't

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<v Speaker 3>love the idea of saying, hey, this is a particular

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<v Speaker 3>way you earn your income, and because of that, we're

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<v Speaker 3>going to we're not going to make you pay taxes

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<v Speaker 3>on this particular kind of income. Same think about somebody

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<v Speaker 3>who's like a landscaper or something like that, and maybe

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<v Speaker 3>they earn a similar amount of money per hour, but

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<v Speaker 3>their income is going to be taxed at regular ordinary

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<v Speaker 3>income tax rates, unlike somebody who's let's say, working in

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<v Speaker 3>the service industry. And so I think it will incentivize

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<v Speaker 3>people to consider different jobs. And I think it will

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<v Speaker 3>also incentivize different businesses to maybe pay their employees less

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<v Speaker 3>and try to rely on tips more and talk about, hey,

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<v Speaker 3>this is actually going to help your tax bill in

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<v Speaker 3>the end. It's also interesting because a lot of the

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<v Speaker 3>people in some of these industries who rely on tips

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<v Speaker 3>in a lot of ways, well, they're not paying much

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<v Speaker 3>in taxes on those tips anyway. So I get because.

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<v Speaker 2>Because they're cash, so they're not claiming them all.

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<v Speaker 3>Well that and also because they don't make enough money

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<v Speaker 3>maybe over the standard deduction to say that there's a

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<v Speaker 3>meaningful tax levied against the income that they're making from tips.

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<v Speaker 3>And of course cash tips are supposed to be reported

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<v Speaker 3>to the IRS, but we all know that doesn't happen

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<v Speaker 3>all the time.

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<v Speaker 1>And then with the servers, they're traditionally not paid very well,

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<v Speaker 1>like have really low base salaries, right, they rely on

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<v Speaker 1>the tips, whereas a gardener may have a higher hourly

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<v Speaker 1>rate but not get the tips.

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<v Speaker 3>Right. But the thing is, at the end of the day,

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<v Speaker 3>their income could be roughly the same and one person

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<v Speaker 3>pays less tax because of just the classification of their income.

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<v Speaker 3>The other thing I think this is going to do,

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<v Speaker 3>and we've seen you alluded to this at the very beginning.

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<v Speaker 3>People are already kind of frustrated with tipping culture in

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<v Speaker 3>the United States. And I'm not I'm not like a

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<v Speaker 3>Europhile or anything like that. I don't want I don't

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<v Speaker 3>want to necessarily turn into Europe. But that's one of

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<v Speaker 3>my favorite things about about Europe is that the servers

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<v Speaker 3>and workers in restaurants and they get paid just a

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<v Speaker 3>regular wags that they agree to work for and then

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<v Speaker 3>tips are off the table. And I like that just

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<v Speaker 3>as a as a consumer, as a customer, and I

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<v Speaker 3>think more, this is actually going to incentivize tipping culture

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<v Speaker 3>to go off the rails even more, and so I

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<v Speaker 3>think there's just a hole. It reminds me of even

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<v Speaker 3>just with the tariffs, And I'm saying, well, with tariffs,

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<v Speaker 3>this is going to incentivize, like on the hardware and

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<v Speaker 3>on the goods, you're going to pay a tariff on

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<v Speaker 3>that stuff. Well, what if instead companies can get you

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<v Speaker 3>to pay a subscription and charge you less for the

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<v Speaker 3>actual device ahead of time, and so we're already in

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<v Speaker 3>this amped up subscription economy. Well, tariffs are going to

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<v Speaker 3>increase that the same thing is true I think of

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<v Speaker 3>no taxes on tips. If this goes through in the

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<v Speaker 3>final big beautiful Bill as it's being called, then it's

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<v Speaker 3>only going to incentivize tipping culture to tilt heavier in

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<v Speaker 3>that direction, and we as consumers are going to be

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<v Speaker 3>even more frustrated. Well, when are we supposed to tip?

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<v Speaker 3>How do we know? And is the company like pulling

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<v Speaker 3>a fast one on me, increasing like you know, higher

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<v Speaker 3>suggested tip amounts and I'm actually paying less for the good.

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<v Speaker 3>Because I'm tipping more, it's going to just make things

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<v Speaker 3>even more difficult I think for consumers to parse.

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<v Speaker 1>And I will tell you in Europe it is frustrating

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<v Speaker 1>because Americans are used to tipping and they're like, yeah,

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<v Speaker 1>you don't have to, but there is sort of this

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<v Speaker 1>should we and there when we were googling it because

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<v Speaker 1>we were just over in Paris in London and they

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<v Speaker 1>were like, well, if you want to tip, you know,

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<v Speaker 1>like a pound or two in London is good. We're like,

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<v Speaker 1>on how much of a bill you know, Like you

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<v Speaker 1>really don't know. It's very It's turned into a very

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<v Speaker 1>ambiguous thing, even though tipping isn't necessarily expected, whereas here

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<v Speaker 1>it's absolutely expected. And I think that the tipping rate

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<v Speaker 1>is getting a little out of control.

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<v Speaker 2>Well I was.

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<v Speaker 3>I was ordering a pizza the other night and I

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<v Speaker 3>ordered it and I was going to go pick it up,

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<v Speaker 3>no delivery or anything, and there was a suggested twenty

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<v Speaker 3>or twenty five percent tip, and I'm like, this was

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<v Speaker 3>not what it used to be. Like like when I'm

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<v Speaker 3>more than okay to tip my server twenty twenty five

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<v Speaker 3>percent when I'm going on to eat and they're waiting

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<v Speaker 3>when you get service, right, but then when you order

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<v Speaker 3>it the counter and then you come pick up your stuff,

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<v Speaker 3>or you order something and you go pick it up yourself.

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<v Speaker 3>The fact that there are these really high suggestive tips,

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<v Speaker 3>this is just this just blurs the lines even more.

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<v Speaker 3>And I think you as a consumer, as an individual,

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<v Speaker 3>need to have an idea of what you're willing to

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<v Speaker 3>tip and what you're willing to tip. For if I

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<v Speaker 3>go out and get a coffee and they handcraft it

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<v Speaker 3>for me, I'm willing to tip a buck or a

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<v Speaker 3>beer saying like that. But you just have to kind

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<v Speaker 3>of know ahead of time, Hey, how much am I

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<v Speaker 3>going to tip on this pizza where I'm paying a

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<v Speaker 3>lot for the pizza and then I'm not necessarily tipping

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<v Speaker 3>someone they're not serving me. So do I tip? How much?

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<v Speaker 2>Do I tip?

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<v Speaker 3>And I think you have to have an idea ahead

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<v Speaker 3>of time what you're willing to tip so you don't

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<v Speaker 3>feel guilted into tipping more than you expected in the moment.

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<v Speaker 2>And that's the thing that really ticks me off about it.

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<v Speaker 1>I don't know how you feel about it, but that

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<v Speaker 1>they they show you the screen and they know that

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<v Speaker 1>it's a tipping screen. And if you go to custom

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<v Speaker 1>and do a zero and even some of them go

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<v Speaker 1>and here's the place to leave a tip, I'm like,

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<v Speaker 1>how dare you say that to me?

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<v Speaker 2>I mean, it's just infuriating.

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<v Speaker 3>It's the world doesn't.

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<v Speaker 1>Do anything for me at all, except like, well, like

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<v Speaker 1>a Dodger statium, and I love Dodger Statium. But when

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<v Speaker 1>they open a beer can for me and then they say, here,

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<v Speaker 1>do you want to do an eighteen percent tip.

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<v Speaker 3>I'm like, no, right on the on the fourteen dollars beer,

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<v Speaker 3>now eighteen dollar beer? Oh hateen? Yeah, sorry, I underestimated.

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<v Speaker 2>Don't get me started, Joel Larsguard. We ran out of time.

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<v Speaker 1>We didn't get to talk about renting instead of buying

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<v Speaker 1>for millionaires. Maybe we can hold that till next week.

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<v Speaker 1>That sounds good, all right, Joel Larsguard. You can hear

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<v Speaker 1>him every Sunday noon to two right here on KFI.

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<v Speaker 1>The show is called how to Money, and you can

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<v Speaker 1>follow him for great financial advice at how to Money.

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<v Speaker 2>Joel. Thanks Joel.

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<v Speaker 3>Thanks Amy