Friday, February 19, 2010

Redistributive tipping

If you're an egalitarian-minded customer, shouldn't you tip in inverse proportion to the attractiveness and charisma of the server?

A gorgeous and charming waiter is going to make above-average tips. Therefore, if you believe in redistribution of wealth as a general principle, you should give that person a low tip, and use the money you save to augment your tips for the plainer servers.

But I've never heard of anyone doing this. I also doubt if any liberals I know give larger tips to lower-wage servers to compensate for their lower wages. They have one fixed percentage, and that's what they always tip. So, if one restaurant has prices that are double the prices at another restaurant, the waiter at the pricier restaurant will make twice as much in tips. It's straightforward class stratification, freely abetted by individual customers.

I know a lot of people (including myself) who claim to be fans of redistribution of wealth, but we don't neutrally apply that principle in all contexts. We want equality, but not too much equality.

23 comments:

Summer Anne said...

Interesting. But you're treating tips like they are charity -- are they? I think of tipping as paying for service. Better service = better tip.

I have noticed that if I let my tip jar get 'too full' (more than about fifteen ones) than my tips will slow.

I think rich people should tip a lot more than poor people do, and I honestly don't understand why they don't. That's evidence that I'm a liberal, I suppose.

Jason (the commenter) said...

I tend to tip greater percentages at cheaper places than expensive ones. Egalitarianism isn't a big driver of my behavior though, I tend to like the people more who work at cheaper places. Perhaps that is some sort of instinctive egalitarianism, because it feels naturally good to me.

Of course, when someone makes a meal for me at home, I never leave a tip, even though I like the server much more than one at a cheap place. They never complain about it, and I have this feeling that if I were to try and tip them, they might get pissed off.

John Althouse Cohen said...

Interesting. But you're treating tips like they are charity -- are they? I think of tipping as paying for service. Better service = better tip.

Good point. I agree that the fundamental rationale for having tips in the first place is that tips reward servers for their service. But given that we're in the United States, a country that emphasizes tipping much more than most countries (which probably has to do with the fact that we're more capitalist than most countries), it's up to individual customers to decide how to put this into practice. The door is open to customers to come up with their own rationales for tipping. I agree that "better service = better tip," but a tipper could apply that rule while also applying my rule.

In fact, my rule, or at least the part about sheer physical attractiveness, actually strengthens your "better service" rule. While many people would prefer to have an unusually attractive waiter, I wouldn't say that he/she has actually given "better service" by virtue of his/her looks. Yet that person probably makes better tips than his/her plainer coworkers. If you artificially inflate your tips to the plainer coworkers, you're correcting the balance so that the tips are more in line with the actual level of service.


I think rich people should tip a lot more than poor people do, and I honestly don't understand why they don't.

That's an interesting suggestion. In pure economic terms, it would probably have good results if poor people never tipped and rich people tipped, oh, 50%, or even more. But that's just not going to happen considering that it's up to individuals' choice. If a well-meaning rich person loves a certain restaurant and would really like to support it, they're much more likely to put this into practice by going to the restaurant more often than by showering the staff with 50% tips. If the rich person felt that it was some kind of social obligation to give 50% tips, this would lead to the rich person eating at restaurants less frequently, which would be worse for the waitstaff.

Jason (the commenter) said...

If you artificially inflate your tips to the plainer coworkers, you're correcting the balance so that the tips are more in line with the actual level of service.

If everyone tipped plainer servers more, servers would go out of their way to look less attractive. Where would this competition lead? Perhaps servers would stop bathing or even disfigure themselves to get better tips. We'd have people who look like homeless beggars as servers.

In pure economic terms, it would probably have good results if poor people never tipped and rich people tipped, oh, 50%, or even more.

I think I see where you are going with this. If poor people never tipped they wouldn't get any attention from the staff, who would be competing for tips from rich patrons. However, the staff would look like homeless people, so poor people wouldn't want their attention.

Nick said...

I have a solution. Don't tip! When i was on holiday in the US I received some of the worst service of my life.

Don't get me wrong. I am happy to tip for exceptional service, not for just someone doing their job. If a server is rude I am not going to tip them.

Ann Althouse said...

I think people who are big on redistributing the wealth are mainly picturing moving somebody else's money around, not their own, and certainly not straight from their wallet into someone else's hand. They want a powerful government powerfully and all-wisely doing the redistribution, and they feel confident that the government in its fabulous wisdom will rake the money out of rich people, with "rich" defined not to include themselves.

John Althouse Cohen said...

If everyone tipped plainer servers more, servers would go out of their way to look less attractive.

That would only be a problem if everyone read this blog post, which is extremely unlikely.

John Althouse Cohen said...

I think people who are big on redistributing the wealth are mainly picturing moving somebody else's money around, not their own, and certainly not straight from their wallet into someone else's hand.

Counterexample: people who give cash to panhandlers. I'm not saying I approve of this practice, but it is a pretty common instance of people voluntarily redistributing wealth directly from their wallet to a needy person. Also, do you dismiss donations to charity? There's also volunteering, which costs money for the volunteers in various ways ("time is money," travel costs, wear and tear on clothes).


They want a powerful government powerfully and all-wisely doing the redistribution, and they feel confident that the government in its fabulous wisdom will rake the money out of rich people, with "rich" defined not to include themselves.

Counterexamples: Warren Buffet, most rich Hollywood actors.

Meade said...

An even more common instance of people voluntarily redistributing wealth directly from their own wallet to a needy person: Parenthood.

Ann Althouse said...

"Also, do you dismiss donations to charity?"

No, charitable giving is a conservative tradition. Redistribution of the wealth is a lefty political ideology. They're quite different. And I don't think waiters who take tips feel that they are basically panhandling. (They're platehandling.)

Ann Althouse said...

"Counterexamples: Warren Buffet, most rich Hollywood actors."

I haven't reviewed their tax filings.

It is in the interest of Hollywood types to profess liberal beliefs. What they do in private, I don't know.

John Althouse Cohen said...

I'm not saying that waiters are panhandlers. I just gave panhandlers as a counterexample to your statement that people don't want to redistribute wealth out of their own wallets.

I don't really understand your point about charity. I mean, I know that conservatives like to say they prefer charitable spending over government spending -- fair enough. But I thought this whole discussion was about ways of privately, voluntarily redistributing wealth. You seemed to be saying that people who like the idea of redistribution of wealth (which includes conservatives, by the way) don't picture it coming out of their own wallet. And I think charitable donations are a pretty clear counterexample.

John Althouse Cohen said...

"Counterexamples: Warren Buffet, most rich Hollywood actors."

I haven't reviewed their tax filings.


Warren Buffett (I misspelled his name before) has been pretty open in discussing the taxes he pays:

Tom [Brokaw]: You've talked about in your office, for example, you pay a much lower tax rate with all of your wealth than, say, a receptionist does.

Warren: That's exactly right, Tom. And I-- I think the only way to do it is with specifics, and-- and - and in our office, 15 people cooperated in a survey out of 18. I didn't make anybody do it. And my total taxes paid-- payroll taxes plus income tax-- and the payroll tax is an income tax. It's based on income.

Tom: Yeah.

Warren: Mine came to-- 17.7 percent. That-- that was the-- that was line 61 I think-- or, no, line 43-- is the percent of taxable income, plus payroll taxes, 17.7 percent. The average for the office was 32.9 percent. There wasn't anybody in the office from the receptionist on that paid as low a tax rate. And I have no tax planning. I don't have an-- I don't have a-- an accountant. I don't have tax shelters. I just follow what the U.S. Congress tells me to do.

Tom: Why do you think that there's not more outrage about that?

Warren: I-- I don't think people understand it. For one thing, you'll see a lot of surveys that say the rich, the top one percent pay this much of the income tax. Now I think what people don't realize is that almost one third of the entire budget comes from payroll taxes. And payroll taxes on income, just like income taxes are taxes on income.

And the payroll tax is over $800 billion out of two and a trillion, or something like that. And people don't understand-- they-- they-- that the rich pay practically no payroll tax. I mean, I paid payroll tax last year on $90 odd thousand, whatever the number is. I paid income tax on $66 million. But my double income tax, one of 'em quits at $90,000. And the remaining $66 million does not get taxed with payroll tax. So, the person who makes $60,000 in our office gets ta-- taxed in full on the payroll tax, and taxed in full on the income tax. And-- and all the statistics you read, particularly the one don't like taxes, well now, they totally ignore the payroll tax. And it's huge now. ...

Most of my income is taxed at 15 percent, and-- and doesn't pay a payroll. Mainly it’s dividends and capital gains. And if you look at the ... Forbes 400, a bunch of my fellow rich guys-- ... their tax rate overall to the federal government will be less than that of their receptionist. And I challenge anybody. If they want to make me a bet on that, and I've urged Congress, both the Senate and the House, to get the figures anonymously from the IRS. Just look at that Forbes 400. Takes a billion three to get on the Forbes 400 this year. And the aggregate wealth is just staggering. And those people are paying less percentage of their total income to the federal government than their receptionists are.

Tom: Will you put some money on the table on this one?

Warren: What--

Tom: You said-- you said you'd pay a million dollars to somebody.

Warren: I'll-- I'll bet-- I'll bet a million dollars against any member of the Forbes 400 who challenges-- me that the average for the Forbes 400 will be less than the average of their receptionists. So, I'm-- I'm-- I'm-- I'll give 'em an 800 number. They can call me. And the million will go to whichever charity the winner-- designates.

Tom: How much are you hearing from your fellow rich fellows, as you describe them?

Warren: I don't hear anything. They're happy. They are not paying the tax rate their receptionists are.

John Althouse Cohen said...

An even more common instance of people voluntarily redistributing wealth directly from their own wallet to a needy person: Parenthood.

Point #10 in this old post of mine is related.

Ann Althouse said...

"But I thought this whole discussion was about ways of privately, voluntarily redistributing wealth. You seemed to be saying that people who like the idea of redistribution of wealth (which includes conservatives, by the way) don't picture it coming out of their own wallet."

I was trying to address the point in your post, that people who believe in redistribution of the wealth don't apply that idea to their own out of pocket voluntary payments. They mainly want the govt doing the redistribution. I actually (as you know) favor govt programs over charity. My problem is that I don't trust the govt. I would prefer if giving wasn't about feeling virtuous and deciding who tugs your heartstrings but about contributing your share to the whole to be spent according to a rational allocation that takes account of incentives and fairness.

Ann Althouse said...

I agree that it's bad that Buffett doesn't pay a bigger percent of his income. I don't understand why that is happening and he doesn't explain why. It's just a werid mystery that Brokaw was useless about.

Jason (the commenter) said...

Jaltoch: Counterexamples: Warren Buffet, most rich Hollywood actors.

Those are people who benefit monetarily from making other people think they support government redistribution of wealth.

Hollywood actors become more popular supporting the position and translate that popularity into money at the box office.

Warren Buffet uses that position to get away scot-free from his unethical business practices.

XWL said...

"If you're an egalitarian-minded customer"

Mistake number one, as a customer, you should have no qualms about being dictatorial while engaging in transactional endeavors.

Trying to live all your actions in a philosophically consistent way is foolish.

It's fine to live by an ethical or/and philosphical code, but there's also such a thing as over thinking.

It's easy enough to make every single action, transaction, and reaction in your life into a moral and philosophical quandry, but I don't see the value in doing so (and I can posit quite a bit of personal damage in going down that road).

Jason (the commenter) said...

XWL has come to let the sophists know they're feeding on ashes. What's the tip for that?

John Althouse Cohen said...

I agree that it's bad that Buffett doesn't pay a bigger percent of his income. I don't understand why that is happening and he doesn't explain why.

Here's his explanation:

"I paid payroll tax last year on $90 odd thousand, whatever the number is. I paid income tax on $66 million. But my double income tax, one of 'em quits at $90,000. And the remaining $66 million does not get taxed with payroll tax. So, the person who makes $60,000 in our office gets ta-- taxed in full on the payroll tax, and taxed in full on the income tax."

I'm glad to know you think (1) the tax system is inequitably regressive and (2) government spending is preferable to charitable spending, at least in theory (but maybe not in practice if government is too inept).

John Althouse Cohen said...

XWL: I don't agree with the flat assertion that customers should have "no qualms" about tipping however they please -- there are ethical considerations -- but I very much agree with the rest of your comment.

Ann Althouse said...

I see: the trick is calling social security "payroll tax" and figuring the percentage based on that and income tax.

beckett said...

People seek redistribution of wealth in various ways, including charity, church giving, and government programs. I think it's true that people don't want to think about the mechanics of distribution, but it's somewhat understandable. "How to effectively alleviate poverty with my excess wealth" is a hard problem and not one that every person who wishes to do so will (or even should) engage in. Asking state or local government to do it (or supporting a party likely to ask the government to do it) are shortcuts, just as giving to partnership for the homeless allows the giver to effectively delegate the process of how best to give one's excess income to help the homeless.

It's name-calling to say that "people who are big on redistributing the wealth are mainly picturing moving somebody else's money around." That's an easy way to discredit people who believe in redistribution, and the poorer a supporter is, the more true it must be. But there are those of us who see wealth redistribution not as a sort of entitlement to other people's money, but as a moral imperative. We seek to redistribute our own wealth as well as that of others.

John, as far as the actual call of your post: I always tip the same percentage because it's easier than pondering it every time I eat at a restaurant. Like charity or political parties, it's a shortcut.