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The Patient Ox (aka Hénock Gugsa)

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Thursday, April 8, 2010

Taxation on Tips - by Hénock Gugsa





Taxation on Tips
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by Hénock Gugsa



( A letter to my congressman *) ...

The Honorable Jim Ramstad
United States House of Representatives
103 Cannon House Office Building
Washington, D.C. 20515

Dear Mr. Ramstad:

Thank you very much for the wonderful work you are doing in Washington presenting the wishes and aspirations of moderate, independent, and responsible citizens of Minnesota. I am especially glad that you are there holding a very important seat in the House Ways and Means Committee. I am aware that taxes are a major area of focus for HWMC. Although new tax legislation is always in the works, tax reforms somehow seem to have been abandoned of late. But, I am seriously concerned by how the Government is so desensitized to some serious fairness issues. With all the obsession and focus on tax cuts for the well-to-do, it seems that a great number of working poor and those on social security are not getting any breaks from the Government. In particular, I respectfully urge you to address the justification(s) for the taxation on tips, and on social security.

In theory and in general, taxes are for the benefit of all citizens. But some aspects of the U.S. tax system can sometimes be egregiously unfair and unnecessary. In my opinion, taxes on tips and on social security should be eliminated for the following reasons:

a) Tips
• Tips are not the type of income for which the Government can claim any service rendered in the creation of that income. Tips are earned income for hard work, not unearned income from inheritance.
• Tips are important to the recipients who are mostly servers and the like who earn minimum wages or less. Taxing tips accomplishes very little for the Government but foster hardship on the group. We may even be encouraging higher unemployment.

b) Social Security
• The Government should have no claim on social security because it was a form of a saving fund whose interest the Government has been squandering away for many, many years.
• Social security as secondary income barely keeps the squeezed recipient above the poverty line.

In conclusion, permit me to offer two radical tax proposals for your serious consideration – eliminate taxes on tips, and also exempt social security from taxes if it is a supplementary source of income.

Thank you.

Sincerely,

Hénock Gugsa

____________________

( * Note: This letter was written and sent to the congressman in 2006. Unfortunately, Mr. Ramstad, a Republican, did not respond. He never even bothered to acknowledge receipt.)










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"To have respect for ourselves guides our morals; and to have a deference for others governs our manners."
Lawrence Sterne (1713 - 1768)
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