Posted by aspenmayer 3 days ago
Low income digital creators can deduct upto 25k in tips, so if their income from tips and other sources is below $150k a year, their taxable income will be 25k less.
Major creators may still not get much since it's a power law distribution, but the tips thing is in no way limited to low income.
I remember something like 2k$ youtube ad revenue for 1M views, so that's like 1M video every 4 days? or was it 2M views per 1k dollars, then it's 1M video every day?
at a biweekly cadence, they'd need ~6M views per video to hit $150k with ads alone. if you figure another $0.025 per view for sponsorships, then they would need 6M views per year or about 240K per video.
looking at Patreon stats, it seems reasonable to assume that a channel with 25K subscribers could pull in about 1K Patreon subs with effort. if each is paying $5/mo, then that would add another $60K/yr in revenue (though I imagine a lot of that would get eaten up by fees and extra costs.
So would be $30k for 1M ad views.
Of course a bit apples to oranges since not all youtube videos have mandatory ads, etc.
Why should tip income not be taxed but other income should be? How is that fair? What principle makes that just?
Are bartenders and servers more deserving of avoiding taxes than cooks and janitors, for some reason?
My girlfriend works for a local chain restaurant. Some of the things she tells me about seem like they shouldn’t be legal (forcing everyone’s cash tips to be pooled with non tipped teenagers they don’t want to pay, for example. Pretty sure the company has had previous class actions against them. This was just a small local chain in a middle/upper middle class suburb.
I saw a post on Nextdoor the other day where another restaurant closed, laying off the workers without paying them for hours worked. The general consensus about how to get the money you worked for: you don’t. The state has no labor board and there was little option for recourse.
> You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return.
Which is obviously true for tips and donations. If it is a gift, then the giver owes taxes, and there is a $19k/year/recipient exclusion, so small gifts like this would always be exempt.
And if you want more progressive taxation, then support more progressive taxation. Treating classes of workers differently is not a way to get to more equitable progressive taxation.
(Please don’t give me bullshit answers based on hundred year old economic theories just because you’re a wanna be libertarian)
The federal capital gains rates are higher than the effective tax rates paid by a family making a median income, but I suspect you are asking why the capital gains rates are not higher than the highest marginal rates.
One issue is simply that capital gains tax rates generally don't account for inflation. If you build a business over a few decades and sell it, much of the increase in value will be simply due to inflation. Do you want to encourage long term investment, or make it so only financially illiterate people do long term investments?
(I do think property taxes should be a land-value tax and not include improvements you've built.)
Property law in the US and most western democracies doesn’t remotely agree with that. Land is not a communal or solely government owned resource, and the govt doesn’t ‘rent’ it out.
Note: I think this is a good thing and that property taxes are vital to our local communities well-being.