300k before your tips start to become taxable??

What in the world is driving this very high ceiling?

Kids of rich people now can exploit this loophole. They can get up to 300k from some fake job and do not pay any taxes on the "tips" part of it. Each month the tips part is going, oh surprise, going to be the maximum allowed by law.

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pests 5 days ago | parent [-]

So they pay tax on 30k but none on the 2k per month. Not that big of a loophole.

	▲	Den_VR 5 days ago \| parent [-]
		More like on top of whatever “free money” they could have as “gifts,” they can now move an extra $2k/month as daddy’s tip.

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ashdksnndck 5 days ago | parent | prev | next [-]

Rich people are more likely to pay accountants to come up with complicated ways to exploit the tax system. If the top 5% had access to this loophole, you’d probably end up with some crazy outcome like 80% of money saved from this deduction goes to the top 5% of earners. And that would make the provision more expensive to include in tax legislation (trading off against other things like the headline tax rate). Since “no tax on tips” was a campaign promise, they probably wanted to keep the promise while setting limits to make it easier to fit into the rest of the bill.

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tdeck 4 days ago | parent [-]

They won't pay accountants, they'll tip them!

	▲	jagged-chisel 4 days ago \| parent [-]
		Only if the accountant’s accountant recommends receiving tips

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5 days ago | parent | prev | next [-]

[deleted]

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cebert 5 days ago | parent | prev | next [-]

300k isn’t what it used to be these days with inflation and cost of living. If you have kids and a house, things get expensive quickly.

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vasco 5 days ago | parent | next [-]

Get real, look at some statistics, that's more than 3x median

	▲	dingnuts 5 days ago \| parent [-]
		[flagged]

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CalRobert 5 days ago | parent | prev [-]

Yes, it was Ferrari money and now it’s just Porsche money. Poor things.

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hiatus 5 days ago | parent [-]

This is the problem when talking about class warfare. We are eating our own. Someone making $300k a year is closer to the median than someone making $5 million a year. Losing ~30% of your spending power since 2008 might not matter if you're a billionaire but for most working professionals it has an impact.

	▲	CalRobert 4 days ago \| parent [-]
		You make a good point - lumping people who make 500k a year with those making 5 million (or 50 million) a year is bad policy. It's still a very good income, though.

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rayiner 5 days ago | parent | prev [-]

That’s a typical phase-out threshold for dedications.