May 27, 2025 • 6 mins
Amy talks with the host of ‘How to Money’ Joel Larsgaard about Trump’s proposed no taxes on tips and renting instead of buying.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Let's say good morning now to the host of How
to Money on KFI every Sunday.
Speaker 2 (00:04):
It's Joel Larsgard.
Speaker 3 (00:06):
Morning, Joel, Morning Amy. Uh.
Speaker 1 (00:09):
We have been talking about the Big Beautiful Bill that
includes no taxes on tips, and so we wanted to
dig into that a little bit and find out one
if you think that's a good idea, and then talk
about tipping in general, because it's really well, it ticks
me off.
Speaker 3 (00:26):
Yeah, the Big Beautiful Bill, there's still like, you know,
how's it going to shake out, And there's a lot
of stuff in it to kind of parse through, and
it's going to impact all of our personal finances based
on you know, how things actually shake out in the end.
And the no tax on tips is one of the
most interesting things to me. And it was a proposal
(00:47):
that seemed like it was kind of by the seat
of the pants, you know, spur of the moment sort
of thought from President Trump on the when he was campaigning.
And then you remember, if if you remember correctly, the
Kamala Harris campaign. Yeah, they're like, yeah, we think it
is a great idea too, and so it's like a
political as a political tool, it makes sense, right, You're
(01:07):
catering to a certain voter class. As a actual policy
being implemented, I think there's a whole bunch of opportunity
to really like swing and miss, and so I don't
love the idea of saying, hey, this is a particular
way you earn your income, and because of that, we're
going to we're not going to make you pay taxes
(01:29):
on this particular kind of income. Same think about somebody
who's like a landscaper or something like that, and maybe
they earn a similar amount of money per hour, but
their income is going to be taxed at regular ordinary
income tax rates, unlike somebody who's let's say, working in
the service industry. And so I think it will incentivize
people to consider different jobs. And I think it will
(01:52):
also incentivize different businesses to maybe pay their employees less
and try to rely on tips more and talk about, hey,
this is actually going to help your tax bill in
the end. It's also interesting because a lot of the
people in some of these industries who rely on tips
in a lot of ways, well, they're not paying much
in taxes on those tips anyway. So I get because.
Speaker 2 (02:13):
Because they're cash, so they're not claiming them all.
Speaker 3 (02:15):
Well that and also because they don't make enough money
maybe over the standard deduction to say that there's a
meaningful tax levied against the income that they're making from tips.
And of course cash tips are supposed to be reported
to the IRS, but we all know that doesn't happen
all the time.
Speaker 1 (02:31):
And then with the servers, they're traditionally not paid very well,
like have really low base salaries, right, they rely on
the tips, whereas a gardener may have a higher hourly
rate but not get the tips.
Speaker 3 (02:47):
Right. But the thing is, at the end of the day,
their income could be roughly the same and one person
pays less tax because of just the classification of their income.
The other thing I think this is going to do,
and we've seen you alluded to this at the very beginning.
People are already kind of frustrated with tipping culture in
the United States. And I'm not I'm not like a
Europhile or anything like that. I don't want I don't
(03:07):
want to necessarily turn into Europe. But that's one of
my favorite things about about Europe is that the servers
and workers in restaurants and they get paid just a
regular wags that they agree to work for and then
tips are off the table. And I like that just
as a as a consumer, as a customer, and I
think more, this is actually going to incentivize tipping culture
(03:31):
to go off the rails even more, and so I
think there's just a hole. It reminds me of even
just with the tariffs, And I'm saying, well, with tariffs,
this is going to incentivize, like on the hardware and
on the goods, you're going to pay a tariff on
that stuff. Well, what if instead companies can get you
to pay a subscription and charge you less for the
actual device ahead of time, and so we're already in
(03:51):
this amped up subscription economy. Well, tariffs are going to
increase that the same thing is true I think of
no taxes on tips. If this goes through in the
final big beautiful Bill as it's being called, then it's
only going to incentivize tipping culture to tilt heavier in
that direction, and we as consumers are going to be
even more frustrated. Well, when are we supposed to tip?
How do we know? And is the company like pulling
(04:14):
a fast one on me, increasing like you know, higher
suggested tip amounts and I'm actually paying less for the good.
Because I'm tipping more, it's going to just make things
even more difficult I think for consumers to parse.
Speaker 1 (04:25):
And I will tell you in Europe it is frustrating
because Americans are used to tipping and they're like, yeah,
you don't have to, but there is sort of this
should we and there when we were googling it because
we were just over in Paris in London and they
were like, well, if you want to tip, you know,
like a pound or two in London is good. We're like,
on how much of a bill you know, Like you
really don't know. It's very It's turned into a very
(04:47):
ambiguous thing, even though tipping isn't necessarily expected, whereas here
it's absolutely expected. And I think that the tipping rate
is getting a little out of control.
Speaker 2 (04:56):
Well I was.
Speaker 3 (04:57):
I was ordering a pizza the other night and I
ordered it and I was going to go pick it up,
no delivery or anything, and there was a suggested twenty
or twenty five percent tip, and I'm like, this was
not what it used to be. Like like when I'm
more than okay to tip my server twenty twenty five
percent when I'm going on to eat and they're waiting
when you get service, right, but then when you order
it the counter and then you come pick up your stuff,
(05:18):
or you order something and you go pick it up yourself.
The fact that there are these really high suggestive tips,
this is just this just blurs the lines even more.
And I think you as a consumer, as an individual,
need to have an idea of what you're willing to
tip and what you're willing to tip. For if I
go out and get a coffee and they handcraft it
for me, I'm willing to tip a buck or a
beer saying like that. But you just have to kind
of know ahead of time, Hey, how much am I
(05:39):
going to tip on this pizza where I'm paying a
lot for the pizza and then I'm not necessarily tipping
someone they're not serving me. So do I tip? How much?
Speaker 2 (05:48):
Do I tip?
Speaker 3 (05:48):
And I think you have to have an idea ahead
of time what you're willing to tip so you don't
feel guilted into tipping more than you expected in the moment.
Speaker 2 (05:55):
And that's the thing that really ticks me off about it.
Speaker 1 (05:57):
I don't know how you feel about it, but that
they they show you the screen and they know that
it's a tipping screen. And if you go to custom
and do a zero and even some of them go
and here's the place to leave a tip, I'm like,
how dare you say that to me?
Speaker 2 (06:12):
I mean, it's just infuriating.
Speaker 3 (06:14):
It's the world doesn't.
Speaker 1 (06:15):
Do anything for me at all, except like, well, like
a Dodger statium, and I love Dodger Statium. But when
they open a beer can for me and then they say, here,
do you want to do an eighteen percent tip.
Speaker 3 (06:24):
I'm like, no, right on the on the fourteen dollars beer,
now eighteen dollar beer? Oh hateen? Yeah, sorry, I underestimated.
Speaker 2 (06:32):
Don't get me started, Joel Larsguard. We ran out of time.
Speaker 1 (06:35):
We didn't get to talk about renting instead of buying
for millionaires. Maybe we can hold that till next week.
That sounds good, all right, Joel Larsguard. You can hear
him every Sunday noon to two right here on KFI.
The show is called how to Money, and you can
follow him for great financial advice at how to Money.
Speaker 2 (06:52):
Joel. Thanks Joel.
Speaker 3 (06:53):
Thanks Amy
Let's say good morning now to the host of How
to Money on KFI every Sunday.
Speaker 2 (00:04):
It's Joel Larsgard.
Speaker 3 (00:06):
Morning, Joel, Morning Amy. Uh.
Speaker 1 (00:09):
We have been talking about the Big Beautiful Bill that
includes no taxes on tips, and so we wanted to
dig into that a little bit and find out one
if you think that's a good idea, and then talk
about tipping in general, because it's really well, it ticks
me off.
Speaker 3 (00:26):
Yeah, the Big Beautiful Bill, there's still like, you know,
how's it going to shake out, And there's a lot
of stuff in it to kind of parse through, and
it's going to impact all of our personal finances based
on you know, how things actually shake out in the end.
And the no tax on tips is one of the
most interesting things to me. And it was a proposal
(00:47):
that seemed like it was kind of by the seat
of the pants, you know, spur of the moment sort
of thought from President Trump on the when he was campaigning.
And then you remember, if if you remember correctly, the
Kamala Harris campaign. Yeah, they're like, yeah, we think it
is a great idea too, and so it's like a
political as a political tool, it makes sense, right, You're
(01:07):
catering to a certain voter class. As a actual policy
being implemented, I think there's a whole bunch of opportunity
to really like swing and miss, and so I don't
love the idea of saying, hey, this is a particular
way you earn your income, and because of that, we're
going to we're not going to make you pay taxes
(01:29):
on this particular kind of income. Same think about somebody
who's like a landscaper or something like that, and maybe
they earn a similar amount of money per hour, but
their income is going to be taxed at regular ordinary
income tax rates, unlike somebody who's let's say, working in
the service industry. And so I think it will incentivize
people to consider different jobs. And I think it will
(01:52):
also incentivize different businesses to maybe pay their employees less
and try to rely on tips more and talk about, hey,
this is actually going to help your tax bill in
the end. It's also interesting because a lot of the
people in some of these industries who rely on tips
in a lot of ways, well, they're not paying much
in taxes on those tips anyway. So I get because.
Speaker 2 (02:13):
Because they're cash, so they're not claiming them all.
Speaker 3 (02:15):
Well that and also because they don't make enough money
maybe over the standard deduction to say that there's a
meaningful tax levied against the income that they're making from tips.
And of course cash tips are supposed to be reported
to the IRS, but we all know that doesn't happen
all the time.
Speaker 1 (02:31):
And then with the servers, they're traditionally not paid very well,
like have really low base salaries, right, they rely on
the tips, whereas a gardener may have a higher hourly
rate but not get the tips.
Speaker 3 (02:47):
Right. But the thing is, at the end of the day,
their income could be roughly the same and one person
pays less tax because of just the classification of their income.
The other thing I think this is going to do,
and we've seen you alluded to this at the very beginning.
People are already kind of frustrated with tipping culture in
the United States. And I'm not I'm not like a
Europhile or anything like that. I don't want I don't
(03:07):
want to necessarily turn into Europe. But that's one of
my favorite things about about Europe is that the servers
and workers in restaurants and they get paid just a
regular wags that they agree to work for and then
tips are off the table. And I like that just
as a as a consumer, as a customer, and I
think more, this is actually going to incentivize tipping culture
(03:31):
to go off the rails even more, and so I
think there's just a hole. It reminds me of even
just with the tariffs, And I'm saying, well, with tariffs,
this is going to incentivize, like on the hardware and
on the goods, you're going to pay a tariff on
that stuff. Well, what if instead companies can get you
to pay a subscription and charge you less for the
actual device ahead of time, and so we're already in
(03:51):
this amped up subscription economy. Well, tariffs are going to
increase that the same thing is true I think of
no taxes on tips. If this goes through in the
final big beautiful Bill as it's being called, then it's
only going to incentivize tipping culture to tilt heavier in
that direction, and we as consumers are going to be
even more frustrated. Well, when are we supposed to tip?
How do we know? And is the company like pulling
(04:14):
a fast one on me, increasing like you know, higher
suggested tip amounts and I'm actually paying less for the good.
Because I'm tipping more, it's going to just make things
even more difficult I think for consumers to parse.
Speaker 1 (04:25):
And I will tell you in Europe it is frustrating
because Americans are used to tipping and they're like, yeah,
you don't have to, but there is sort of this
should we and there when we were googling it because
we were just over in Paris in London and they
were like, well, if you want to tip, you know,
like a pound or two in London is good. We're like,
on how much of a bill you know, Like you
really don't know. It's very It's turned into a very
(04:47):
ambiguous thing, even though tipping isn't necessarily expected, whereas here
it's absolutely expected. And I think that the tipping rate
is getting a little out of control.
Speaker 2 (04:56):
Well I was.
Speaker 3 (04:57):
I was ordering a pizza the other night and I
ordered it and I was going to go pick it up,
no delivery or anything, and there was a suggested twenty
or twenty five percent tip, and I'm like, this was
not what it used to be. Like like when I'm
more than okay to tip my server twenty twenty five
percent when I'm going on to eat and they're waiting
when you get service, right, but then when you order
it the counter and then you come pick up your stuff,
(05:18):
or you order something and you go pick it up yourself.
The fact that there are these really high suggestive tips,
this is just this just blurs the lines even more.
And I think you as a consumer, as an individual,
need to have an idea of what you're willing to
tip and what you're willing to tip. For if I
go out and get a coffee and they handcraft it
for me, I'm willing to tip a buck or a
beer saying like that. But you just have to kind
of know ahead of time, Hey, how much am I
(05:39):
going to tip on this pizza where I'm paying a
lot for the pizza and then I'm not necessarily tipping
someone they're not serving me. So do I tip? How much?
Speaker 2 (05:48):
Do I tip?
Speaker 3 (05:48):
And I think you have to have an idea ahead
of time what you're willing to tip so you don't
feel guilted into tipping more than you expected in the moment.
Speaker 2 (05:55):
And that's the thing that really ticks me off about it.
Speaker 1 (05:57):
I don't know how you feel about it, but that
they they show you the screen and they know that
it's a tipping screen. And if you go to custom
and do a zero and even some of them go
and here's the place to leave a tip, I'm like,
how dare you say that to me?
Speaker 2 (06:12):
I mean, it's just infuriating.
Speaker 3 (06:14):
It's the world doesn't.
Speaker 1 (06:15):
Do anything for me at all, except like, well, like
a Dodger statium, and I love Dodger Statium. But when
they open a beer can for me and then they say, here,
do you want to do an eighteen percent tip.
Speaker 3 (06:24):
I'm like, no, right on the on the fourteen dollars beer,
now eighteen dollar beer? Oh hateen? Yeah, sorry, I underestimated.
Speaker 2 (06:32):
Don't get me started, Joel Larsguard. We ran out of time.
Speaker 1 (06:35):
We didn't get to talk about renting instead of buying
for millionaires. Maybe we can hold that till next week.
That sounds good, all right, Joel Larsguard. You can hear
him every Sunday noon to two right here on KFI.
The show is called how to Money, and you can
follow him for great financial advice at how to Money.
Speaker 2 (06:52):
Joel. Thanks Joel.
Speaker 3 (06:53):
Thanks Amy
Popular Podcasts
United States of Kennedy
United States of Kennedy is a podcast about our cultural fascination with the Kennedy dynasty. Every week, hosts Lyra Smith and George Civeris go into one aspect of the Kennedy story.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com