Connect with us

Business

Opinion: Tipping culture is out of control. Trump and Harris would make it worse

Published

on

Opinion: Tipping culture is out of control. Trump and Harris would make it worse

If you left the U.S. for a summer vacation, you may have encountered a strange and refreshing custom: not tipping. Or at least not tipping everyone in sight.

Americans have long been among the world’s most profligate tippers. “We tip more occupations than any other country, and we tend to tip larger amounts than other countries,” says Michael Lynn, a professor of consumer behavior at Cornell University’s School of Hotel Administration whose research focuses on tipping. “We’re kind of the tip-happiest country out there.”

Just wait. American tipping culture is poised to get even more intense. In a rare case of bipartisan agreement, presidential candidates Donald Trump and Kamala Harris both advocate exempting tips from federal income taxes. It’s a popular stance with many potential voters, notably in Nevada, a swing state whose many casino, hotel and restaurant workers rely heavily on tips.

The idea would be bad news for customers — and perhaps even for tipped workers themselves.

Consumers are already weary of the way tip expectations have expanded since the pandemic. As people curbed their restaurant dining to avoid COVID-19, they increased the size of the tips they left, whether for dining in, takeout or delivery. Meanwhile businesses gravitated toward machines for cashless, no-contact transactions.

Advertisement

Soon tip jars that once collected loose change at cash registers morphed into touch screens suggesting significantly larger tip amounts, even for small purchases. Restaurants without waiter service — and takeout coffee places — now come with pressure to tip.

A Pew Research Center survey last November found that 72% of U.S. adults believe tipping is expected at more places than five years ago. You have to wonder how often the other 28% get out of the house.

It’s all a bit much. In a February WalletHub survey, three out of four respondents said tipping has gotten out of control. Tipping isn’t just a financial burden. It creates psychological stress. Is a tip optional or expected? How much is enough? Am I a bad person if I say no?

Excluding tips from federal income tax might simplify employer paperwork and erase the difference between easily tracked credit card charges and cash gratuities, which often go unreported. The exemption could also allow employers to pay lower (taxed) wages, because workers would have the hope of keeping more (untaxed) tips.

All of those factors would encourage even more transactions to come with real or virtual tip jars. If your barista, tattoo artist and massage therapist get tips, why not the supermarket cashier, dental hygienist and plumber? Tipping in those situations might seem odd, even unseemly today, but tax-free income is hard to resist.

Advertisement

Vice President Harris has specified that the exemption would apply to “service and hospitality workers,” but they aren’t the only people who currently receive tips. It’s hard to imagine those limits surviving the political pressure to include at least all tipped workers below a given income threshold.

Either way, however, the proposal picks winners. To help all workers in low-paid jobs, presidential candidates might propose increasing the standard deduction or the earned income tax credit. That would be fairer. But the tip loophole isn’t about a general increase in take-home pay; it’s about winning votes in Nevada.

Like the tax credits that oil companies get for blending ethanol with gasoline, thereby subsidizing demand for Iowa corn, making tips tax free offers big benefits to a concentrated group while spreading the costs over the general public. Nobody’s likely to vote against a candidate because they dread proliferating tip jars, but workers who make a lot of tips might vote for them.

If either proposal came to pass, the revenue forgone by the Treasury would have to come from somewhere else. But that would be a “next year” problem, an unpleasant reality not destined to get much attention this fall or sway many votes in November.

That’s why we see two fiercely opposed candidates rushing to agree on this harebrained scheme. We can only hope that they cancel each other out and that whoever is elected drops the idea.

Advertisement

Virginia Postrel is a contributing editor for WorksinProgress.co and writes a newsletter at vpostrel.substack.com. Her most recent book is “The Fabric of Civilization: How Textiles Made the World.”

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

Near-boiling coffee with a faulty lid left Starbucks customer badly burned, suit says

Published

on

Near-boiling coffee with a faulty lid left Starbucks customer badly burned, suit says

A South Los Angeles woman is suing Starbucks for negligence, alleging she was scalded at a drive-through window in Lynwood.

Muriel Evans filed a complaint Wednesday with the Los Angeles County Superior Court in Compton. She alleges that a faulty coffee cup lid and the excessive heat from her beverage led to severe burns after a barista spilled coffee into her lap.

Evans is asking for general and special damages, including her medical, hospital and incidental expenses, and punitive damages to “set an example” of Starbucks. She alleges the corporation is indifferent “to the obviously dangerous mixture of excessively hot temperatures combined with defective lids.”

“Starbucks has shown a reckless disregard for the safety of its customers, continuing to serve scalding hot coffee in defective cups despite countless reports and warnings,” Evans’ attorney Nick Rowley said in a statement.

A Starbucks representative responded briefly: “We take pride in ensuring our beverages are crafted with care and delivered to customers safely. We take all claims seriously, but we will not be commenting on pending litigation.”

Advertisement

Evans pulled into the Starbucks drive-through on Aug. 25, 2022, and ordered a coffee, according to the lawsuit.

A Starbucks employee then “mishandled” the coffee and spilled it onto Evans’ lap, with the hot liquid rolling down her left leg, according to the lawsuit.

A South Los Angeles woman says her leg was severely injured after the lid came off a cup of 190-degree Starbucks coffee.

(Courtesy of Trial Lawyers for Justice)

Advertisement

Evans said she suffered severe burns to her body along with nerve damage and disfigurement.

Evans’ legal team believes the coffee’s temperature was 190 degrees, just a little less than boiling.

Previous Starbucks guides have listed most hot beverages at between 150 and 170 degrees.

Water heated to 120 degrees takes five to 10 minutes to cause a third-degree burn; at 131 degrees, it’s 10 to 30 seconds; and at 140 degrees, it’s two to five seconds, according to the National Center for Biotechnology Information.

As for the lids, there have been various media articles and threads and videos complaining about Starbucks’ lids and their ease in falling off, including on Reddit and TikTok.

Advertisement

Starbucks is facing similar lid lawsuits.

A San Fernando Valley teen filed a suit in June against the company, alleging she was burned by hot tea. The teen’s drink was double-cupped, but the lid popped off, the lawsuit alleges.

“Muriel Evans suffered severe burns because Starbucks prioritized cost-cutting over basic customer safety,” Rowley said. “We intend to hold Starbucks fully accountable for their blatant disregard and gross negligence.”

Advertisement
Continue Reading

Business

Court approves $600-million sale of Michael Jackson music to Sony

Published

on

Court approves 0-million sale of Michael Jackson music to Sony

A Los Angeles appeals court has denied an attempt by Michael Jackson’s mother to prevent the singer’s estate from selling a portion of his songs to Sony Music Group for about $600 million.

The appeals court on Wednesday upheld a prior ruling by a probate court that Katherine Jackson’s objections to the transaction do not hold water.

The appeals court determined that Michael Jackson’s will grants the musician’s executors “broad powers to buy and sell estate assets in the estate’s best interests” while stipulating that “all of the estate’s assets will be distributed to the trust” — of which the performer’s mother and children are beneficiaries.

Katherine Jackson had tried to argue that those provisions were contradictory, but the appeals court disagreed.

The appeals court also rejected Katherine Jackson’s challenge on grounds that she “forfeited her contention that the proposed transaction violates the terms of Michael’s will because she did not make that contention” in a lower court.

Advertisement

According to court documents, Katherine Jackson had previously complained that selling assets from Michael Jackson’s catalog would violate her son’s wishes, but acknowledged that executors had the power to do so. The appeals court also noted that Katherine Jackson was the only family member and beneficiary of the trust to formally object to the sale.

An attorney for Katherine Jackson did not immediately respond Thursday to The Times’ request for comment.

“We conclude that the provisions are not inconsistent: Read together, they give the executors broad powers to manage estate property while the estate remains in probate, and they provide for the transfer of all estate property to the trust when the probate action is concluded,” Wednesday’s opinion reads.

“The proposed transaction is consistent with the terms of Michael’s will as so interpreted, and thus the probate court did not abuse its discretion by granting the executors’ petition.”

In February, Sony Music Group closed a deal to purchase half of Michael Jackson’s masters for at least $600 million, according to Billboard.

Advertisement

Times news researcher Scott Wilson contributed to this report.

Continue Reading

Business

SpaceX will bring Boeing's Starliner astronauts home from the International Space Station

Published

on

SpaceX will bring Boeing's Starliner astronauts home from the International Space Station

SpaceX will bring home the two astronauts stranded on the International Space Station for the past two months due to troubles with Boeing’s Starliner spacecraft, NASA announced Saturday.

NASA Administrator Bill Nelson said the decision, which followed a formal review conducted Saturday, was driven by the agency’s commitment to safety, especially following the loss of 14 astronauts in the 1986 Challenger explosion and the 2003 Columbia disaster on its return to earth.

“This whole discussion, remember, is put in the context of we have had mistakes done in the past,” Nelson said at a news conference at the Johnson Space Center in Houston. “Space flight is risky, even at its safest and even at its most routine. And a test flight by nature is neither safe nor routine.”

The decision by NASA to bring home astronauts Butch Wilmore and Suni Williams on SpaceX’s Crew Dragon capsule in February follows months of irregularities that have hobbled the third test flight of Boeing’s Starliner spacecraft — which began even before its June 5 launch.

The outcome is not only a blow to Boeing, whose Starliner program is years behind schedule, but to NASA, which awarded multibillion-dollar contracts to the company and rival SpaceX in 2014 to service the space agency with crews and cargo.

Advertisement

Since 2020, Elon Musk’s Hawthorne-based company has ferried more than half a dozen crews there aboard its Crew Dragon capsule — while Boeing has managed only two remote flights prior to this one, including one in May 2022 that docked with the orbiting lab.

NASA said Saturday that the Starliner will now return to earth remotely next month. The SpaceX mission that will bring Wilmore and Williams home is scheduled to blast off Sept. 24.

Gwynne Shotwell, SpaceX’s chief operating officer, responded to the announcement with a post on X, the social media platform formerly known as Twitter. “SpaceX stands ready to support @NASA however we can,” she said.

Steve Stich, manager of NASA’s Commercial Crew Program, said the decision resulted from inconclusive ground tests that were conducted on the thrusters after they malfunctioned when Starliner docked with the space station on June 6.

“As we got more and more data over the summer, and understood the uncertainty of that data, it became very clear to us that the best course of action was to return Starliner uncrewed,” he said. “If we had a model, if we had a way to accurately predict what the thrusters would do …. I think we would have taken a different course of action.”

Advertisement

The problems that have plagued Starliner have been an embarrassment for Boeing, which is still grappling with an investigation into a door plug that blew out during a 737 Max 9 flight this year to Ontario International Airport in San Bernardino County. That followed the two crashes of its 737 Max 8 jets several years ago that severely damaged its reputation for safety.

Just this month, Boeing wrote off $125 million in expenses related to the Starliner program after previously booking some $1.5 billion in cost overruns.

Nelson said Saturday he informed Boeing’s new chief executive, Kelly Ortberg, of the decision, and that the executive committed to working with the agency to resolve the problems with Starliner. Nelson said that will give the agency the “redundancy” it has wanted to service the station.

In a statement Saturday, Boeing said, “We continue to focus, first and foremost, on the safety of the crew and spacecraft. We are executing the mission as determined by NASA, and we are preparing the spacecraft for a safe and successful uncrewed return.”

For years, NASA had to rely solely on Russia’s Soyuz craft to send U.S. astronauts to the station after the Space Shuttle program ended in 2011. NASA plans to continue to partner with the Russian program, which along with the U.S. was the primary constructor of the orbiting lab that first launched in 1998.

Advertisement

The latest Starliner mission, which was expected to last about a week, was plagued with troubles.

The capsule was originally set to blast off May 6, but that flight was scuttled because of a malfunctioning valve on the Atlas V rocket that launches it into space. Additional launch dates were missed after a helium leak was found in the propulsion system that propels Starliner in space.

The helium pressurizes the system’s rocket fuel but NASA and Boeing officials decided the leak was not serious and developed software fixes to work around it. However, the leak grew larger as the spacecraft approached and docked with the space station the next day.

More concerning was that the propulsion system’s thruster engines malfunctioned during the docking procedure.

Ground testing on an identical thruster NASA conducted last month found that Teflon used to control the flow of rocket propellant eroded under high heat conditions, while different seals that control the helium gas showed bulging.

Advertisement

NASA officials have maintained Starliner has 10 times more helium than it needs to return to earth and the craft could be used if there were an emergency situation aboard the space station. This month Boeing issued a statement that cited all the testing that had been conducted and concluded, “Boeing remains confident in the Starliner spacecraft and its ability to return safely with crew.”

The aging space station is scheduled to be retired in 2030. In June, NASA awarded SpaceX an $843-million contract to build a craft that would nudge the station safely out of its orbit so it can burn up in the atmosphere, with any stray pieces landing in remote areas of the ocean.

The troubles afflicting Starliner mean that if it ever receives agency clearance to send working crews to the space station, it will provide that service for far fewer years. Boeing, however, has said it wants to use the craft to service the commercial space station being developed by Jeff Bezo’s Blue Origin rocket company.

Unlike the Space X’s Crew Dragon capsule, which lands in water, Starliner will touch down in the Arizona or New Mexico desert in a parachute ground landing pioneered by the Soviets decades ago. That makes it easier to ready the reusable craft for another launch.

However, the propulsion system is jettisoned in space, so NASA and Boeing engineers will not have a chance to take it apart and examine exactly what went wrong.

Advertisement
Continue Reading

Trending