Thursday, July 06, 2006

The "Tipping" Point

She said

Y'day I got back from Seattle and had reserved a shuttle to drop me from the airport to my home.They picked me up about 40 mins after I had landed so I was late late late for work.While on the shuttle I realised that I had to no cash to tip the driver and since I had already paid by cc online there was no way I could include it in the tab.He dropped me off and I thanked him and scurried off before he could give me a dirty look or something.

But the thing is I felt bad about it,that got me thinking about the whole idea of giving a tip.In India it is not expected ;though as anywhere it is appreciated and is definitely not expected to be minimum of 10-15% of the bill.I understand that most people in the service industry here make most of their money by tips and I have no reservations on tipping generously.

What I don't know is how to account for tips in my budget..Do they come under expenses?or charity?Is it tax deductible if I hand out 10 bucks for every cab ride I take?To me it appears like I am giving money away it just something between me and the person who gets it or should I get the government involved .... Thoughts anyone?


fobbierobbie said...

I think the fact that you feel bad is part of the answer to your question. Or at least, what I would view as the answer.

Your question, expenses or charity, is, at the root, a question of the nature of the tip. Is it perceived as necessary or as a gift? Given that you feel bad, I believe that you would view it as a gift (at least I would hope, given that I know you I know this is the case).

For you then, I would consider it (from your standpoint) as a question of charity. While charity is certainly tax-deductible that, in my opinion, tarnishes the act of giving. I would venture that the tax-deductible nature of "giving" is a carrot for selfish rich folk to gain something in return for altruism (and we see the problem).

BUT if you see it as necessary, that is you're simply paying their wage, then why not get the government invovled? Claim it as a tax-deductible charity and right off it off in your balance book as an expense, but don't you dare pat yourself on the back. Because the moment you do that you lose sight of the whole purpose for altruism in the first place...

Of course, this is my opinion.

Anoop said...

I see your point regarding the fact the many rich people donate money and claim tax benefits. It has perhaps become such a prevalent situation that people donate money to charity _only_ to claim tax benefits.

However, if someone donates to charity without any thoughts of tax benefits why should he/she pay tax for that money also?

I believe it is the "thought" that counts. Some donate money for helping other human beings while some donate money to claim tax benefits. So claiming tax benefits, does not "necessarily" defeat the altruistic ideals.