Ethics

Do you consider it ethical, and hence decorous, to use cash when tipping restaurant servers with the express purpose of helping the server avoid paying income tax on the gratuity?

Comments

I don't know about the decorous issues involved here, but paying cash does not help the employee avoid income tax. He or she will be expected to report tips, at least in the United States, and I am sure elsewhere also. Putting that aside, and it is not that relevant since the question relates to the direct purpose of paying cash, it might depend on your view of the state and its taxes. If you think that those taxes are improperly used, then you might want not to contribute to them in any way you can avoid, hence using cash is a good idea. On the other hand, you may think that despite that citizens have a duty to participate in the tax system fully, since we ought all to obey the law. Is hiding income a slippery slope, leading eventually to more serious offenses against the state and each other like theft? It could well be argud that it was so it seems to me that if the express purpose of paying cash is to evade tax obligations, then it is wrong.

Countries whose citizens see the state as a body to be avoided as much as possible and where paying taxes is more of a voluntary than a necessary activity do not work as well as states where on the whole citizens feel they need to pay for the running of the state. If this is true, then there are good consequentialist reasons for acknowledging in everyday life our obligations to pay our taxes, in just the same way that we acknowledge our obligations to others by handing in lost property that we could easily hold onto and appropriate for our own use. The slippery slope argument is useful here, since finding someone else's property and wondering whether I would make better use of it than the original owner soon deteriorates into considering taking things from others where the same principle obtains. Self-deception about such judgments are of course also a constant problem. So tippers beware of paying cash to avoid tax!

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