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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:26 PM
Original message
Dirty Little Trick #33,671
Edited on Mon Oct-15-07 03:32 PM by WilliamPitt
(Note: Dirty Little Tricks #1 - 33,670 are available for review and analysis at www.WhiteHouse.gov under the section titled...oh hell, who am I kidding, they're under all the sections, just click anything, you can't possibly miss 'em)

Dirty Little Trick #33,671

This one is titled "How Your Favorite Waiter/Barkeep is Screwing America In Order To Pay The Rent, And Why This Makes Some People Very Happy."

The word nowadays says we have a “service economy” in America…yes, our economic engine runs on people buying stuff from other people who wear nametags and run cash registers, or wait tables, or tend bar, or manage money, or perform some other kind of “service” as a job. Wartime economic footing? Billions and trillions spent on defense? Pish posh.

I know dozens of people who do “service industry” work, young and old alike, and the only ones I know who “manufacture” anything are the ones making bicycle frames from scratch at Independent and Bikes Not Bombs. The others are, for the most part, just trying to survive.

But did you know this setup is substantially depleting the amount of tax dollars being collected, that each year brings less tax revenue than the year before (said decrease being inversely matched by the increase in “service industry” workers)…thus, we have less money each year to fund highway and infrastructure maintenance, public schools, emergency response people, health programs…and basically every other tax-supported thing in America besides warfare and space shuttles.

How?

The restaurant/bar industry, which employs millions of people all over the country, operates almost entirely on a cash-only basis. Waiters, waitresses, bartenders, line cooks, busboys, barbacks, bouncers – nearly all of them - make something like $2.15 an hour in paycheck-delivered wages, but make the real money through tips. That’s tens of thousands of dollars annually earned in tips by professional waitstaffers/bartenders, give or take, and pretty much all of it is undeclared and therefore untaxed.

Every bartender I know has a dresser drawer literally filled with ones, fives, tens…but the tax man only sees $2.15/hr x 52 weeks on the W2, which barely cracks five figures and which, by law, means they’re “in poverty” and exempt from taxation. None of them declare all that cash…ever. Bear in mind, we're not talking about megabucks here; if these folks make $30K a year on tips, I'd be amazed. They make enough to stay afloat (and drink/eat either free or cheap), so individually they aren't blowing holes in our public funds...but 50,000 of them? Just in one state?

No, they don't declare that cash...unless they have to. All my barkeep friends avoid getting featured in one of those indy-mag “Our Favorite Bartenders 2007” articles, I mean they avoid it like the black plague. Why? Because every bartender who gets featured in one of those annual “Best Whatever” stories ends up, without fail, getting their whole ass audited off by the IRS. If they’re a city “favorite,” goes the thinking, then they must be making gobs in tips, but somehow their last tax return didn’t reflect this, hmmm…yes, the agent will see you now.

So.

That’s a neat way to “drown the government in the bathtub,” yes? Undermine the revenue stream, undermine government’s ability to function, run for office on a “Government don’t solve problems, government is the problem” platform (thanks to generous campaign contributions from certain persons and/or entities who are just dying for a chance to vacuum up whatever Social Security/Medicare tax dollars are still available), and finally privatize the whole damned thing once and for all.

I mean…we can’t raise taxes, right? Even if we did, there still ain’t going to be any tax money collected from those “service industry” cash-only workers, which is just more proof that government doesn’t work, so let’s privatize everything from soup to nuts to Grandma’s dialysis treatments…and besides, we can’t afford all these public entitlement programs while there’s a war on (Or is it two wars now? Three? Whatever). That’d be plain old un-American of us, right?

Slick.
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Richard Steele Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:28 PM
Response to Original message
1. K&R
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Horse with no Name Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:30 PM
Response to Original message
2. Absolutely spot on.
The lower the wages go...the less tax revenue we receive, but even more important....the MORE that goes out (think Earned Income Credit). Not complaining about the ones who receive that, it is just an unintended consequence.
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Jack Bone Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:32 PM
Response to Original message
3. excellent!!
K&R:kick:
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Coexist Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:35 PM
Response to Original message
4. back in the day...
Edited on Mon Oct-15-07 03:35 PM by FLDem5
I got most of my tips in cash, and the restaurant owners made us write in a minimum of $X each week in tips (we mostly wrote in the minimum).

When I began to work in a "fancy" restaurant, people all used their credit cards, and the tips were there in black and white - there is no hiding them.

Bartending was different (I pulled pints in Buffalo and on Cape Cod) - you mostly get cash tips, unless they buy by the bottle. But even then, my employers made me declare an amount for tips (right on my time card) - I was never allowed to say I made $0.00 in tips.

When I worked in the Caribbean, most patrons charged to their rooms or credit cards, tips revealed there, too.

And I never had a "drawerfull" of cash. A fistful, maybe.

Granted I haven't waited tables or tended bar for 18 years, but still.

Where do these people work???


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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 03:43 PM
Response to Reply #4
5. Let's see.
Edited on Mon Oct-15-07 03:46 PM by WilliamPitt
I'm friends with a dozen bartenders at least, a dozen more waitstaffers, six or seven chefs/line cooks (who are mostly on salary but get a cut of the tips each night) two valet drivers, and a handful of hostesses/maitre-d's (sp?) who likewise get a cut of the nightly tip take.

Maybe 50 people total, all making two bucks an hour on paper but pulling in hundreds a week off the books.

That's three bars and five restaurants. Multiply that by however many restaurants and bars there are in downtown Boston alone, and...

P.S. The money's that tall because these places are either right by Fenway (and thus gouge like maniacs), or are on posh-as-all-hell Newbury Street, where the elite meet to greet and spend zillions on shoes and designer garbage.
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Coexist Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:11 PM
Original message
did they tell you they don't declare any tips?
I was forced to, even if I just wrote in $20.

I am not being argumentative, I just can't figure that out.

The posher the place I worked, the more likely people were to use credit cards (more so as a waitress than as a bartender) and when a tip is written in on a credit card receipt, that amount was automatically added to my tip total for the week. That was even though we tipped out the bartenders/busboys in cash every night.

My daughter is too young to wait tables now (they serve alcohol), but she is a food runner, and she gets a check each week - her 'tip-outs' are included in her check, not given in cash at the end of the night, so she won't ever be able to hide tips.

Do a lot of people pay in cash in Boston? They didn't on the Cape (again, 18 years ago).
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:15 PM
Response to Original message
7. Cash-only bars.
Tips wind up getting automatically tabulated and declared when they come via credit card. Cash tips...woosh, like the wind.
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:33 PM
Response to Original message
13. Here too. My friend waits tables and she is "charged" a percentage
of all her checks, whether they tipped the "proper amount" or not..

Mass must be "old school"..

My friend hated it when this became the rule, because if she got a $5 tip, and the percentage amount ended up being $7, she paid taxes on $2 she never even got :(
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Ms. Toad Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 07:33 PM
Response to Reply #13
74. Your friend needs to keep track of actual tips
If she really is being taxed on tips she didn't make, there is a mechanism for reporting actual tips she received (as opposed to the minimum percentage the federal govt requires employers to report).

On the other hand if your friend was - on the average - making larger tips than the % reported to the IRS, then legally she should be reporting that higher tip level. Funny, in all the years I did taxes, no one ever reported any tips other than the ones employers reported on their W-2 forms...
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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 07:40 PM
Response to Reply #74
75. She did keep an acurate log..(she no longer waits tables)
and yes..they did adjust for the cheapos..but it still places an extra burden on people who are paid very little, and who have to endure a lot of crap.. just to make a living.. We always tip EXTRA, just to help make up for the cheapies :)
(unless we get horrible service.... then it's the minimum required)
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Ms. Toad Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 07:49 PM
Response to Reply #75
76. There are just a lot of people who don't know
that if they are assigned all of the breakfast hours (and thus don't make the percentage the govt requires to be reported) that they have a right to be taxed only on the amount they actually make.

Personally, I'd rather do away with the entire tipping system and pay people a decent wage. That way those paid less than minimum wage won't be reliant on the generosity of patrons to make a minimum wage and folks will report (and pay taxes on) whatever they actually earn. That said until the tipping system is eliminated, we always tip around 20% because I don't think the folks who rely on tips should foot the bill for the unfair system.
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:31 PM
Response to Reply #4
12. i always try to leave a cash tip when i use a credit card.
as a former waiter, i know that it's greatly preferred.
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LanternWaste Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:07 AM
Response to Reply #4
65. I waited tables for two summers in 1985 and '86
I waited tables for two summers in 1985 and '86, and for all intents and purposes my experiences lined up pretty much with what Will wrote. The only (minor) difference being that, though we too were forced to write down our tip amounts at the end of the pay period, everyone (*everyone*) low-balled that number-- my manager suggested that I write in the standard figure everyone else did-- $17.50/wk in tips. That was a "magic" number for some reason, although I never figured out why.

And I didn't stuff my cash in a drawer-- it was coffee cans.

I was actually tipped three loose joints one evening. I got a kick out that for some reason...
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louis-t Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:11 PM
Response to Original message
6. In Michigan, waiter/waitress and bar staff
have to pay taxes on 8% whether they make that much in tips or not, thanks to our previous repug governor John "I lowered 25 taxes for my friends in big business and caused a $4 bil. deficit" Engler.
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librechik Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:21 PM
Response to Reply #6
8. yeah--in Colorado they estimate how much they think you made in tips
and tax you on that whether you declare it or not!
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1monster Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:23 PM
Response to Original message
9. I do believe that wait staff are taxed for at least eight percent of every
table/ticket they wait.

I think that became law about ten years ago?

So, if you don't tip your waiter/waitress at least 8% of the ticket, you are costing them money...
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:27 PM
Response to Original message
10. that's a very UN-informed post...
they've been taxing tips for many years now. it's been 20 years since i waited tables- and i had to report tip income.
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TalkingDog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:48 PM
Response to Reply #10
15. I worked in a restaurant and the owner would come in on Friday evening.
Hand us the tip tax calculation forms and we would literally sit down and fill them out.

If we didn't, no paycheck for us. That was in 1984.

Now that's not to say we didn't "cook the books" so to speak and underreport, but we had to at least report enough so that it showed we were making minimum. If we didn't the law (state I guess) required the restaurant to make up the difference.

No drawers of cash for me. And I've got the student loans to prove it.

My Favorite Master Artist: Karen Parker GhostWoman Studios
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Stephanie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:13 PM
Response to Reply #15
27. The law changed in 1988.
See my post below.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:01 PM
Response to Reply #10
19. Post 7
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:10 PM
Response to Reply #19
25. cash-only bars? never heard of one.
and even in the places where the tips are all cash- you still have to declare a certain amount for the tax man. that's just how it's done. sorry.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:18 PM
Response to Reply #25
30. Fair enough.
I am apparently misinformed.

Lots of cash bars in Boston. Keeps the students honest, and cuts down on the bullshit.
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October Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:20 PM
Response to Reply #30
43. Philly, too.
There are even a few luncheonette-type places and restaurants in our area that take NO credit cards.
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Kingshakabobo Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:35 PM
Response to Reply #25
34. I know several in Chicago........Yakzie's on Clark is one of them.
Edited on Mon Oct-15-07 05:42 PM by Kingshakabobo
No credit cards - ever - at any of their locations and they do HUGE business. I used to be friends with a couple of their heavy hitting bartenders and they used to chuckle about their "$13,000 dollar per year income"......I remember one of them showing me his new loft and saying "all this on $13,000 per year.....LOL...."

I think Pitt's point holds water when it comes to the true "professionals" with established clientele working busy places. I know some gay-bar bartenders that gross close to six figures - I've done their mortgage loans.

edit: Yakzie's spelling
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TransitJohn Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:28 PM
Response to Original message
11. Yes this is a crock Will...
...and I've always adamantly believed that if their tips are subject to federal income tax....shouldn't they have to make the freakin' federal minimum wage??
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conscious evolution Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:43 PM
Response to Original message
14. Waitrons are/were taxed at 8% of cash sales
and all of the tips on credit cards.
I never put tips on the card.That $0.00 on the reciept is proof they got stiffed on that table.
Always tip in cash.That way they only get taxed on 8% of the bill.

Waitrons should also keep a log book with every tip listed.More proof for the irs.
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cuke Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:50 PM
Response to Original message
16. Actually, the IRS has been cracking down on unreported tips
Part of turning the IRS away from the big cheats has been to refocus the IRS on the little cheats. They've started estimating tips for waitrons. They're quite generous with their estimates
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endarkenment Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:54 PM
Response to Original message
17. Fact check.
The IRS taxes tips at an assumed flat rate as others here have noted. Restaurant service industry workers are some of the worst paid hardest working people in this country. Way to pick on the folks at th bottom.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:02 PM
Response to Reply #17
21. Excuse me
a) I'm talking about beloved friends of mine;

b) This isn't their fault.

c) See a and b.

d) This is what they tell me.
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Stephanie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:16 PM
Response to Reply #21
29. Tell them to check their pay stubs.
They are being taxed on those assumed tips. Remember also that while they may be averaging 15% tips and getting taxed on 8%, they are also tipping out to the bartender, busboy, food runner, barback, whatever their sytem is, so they are probably being taxed fairly accurately relative to what they actually take home.
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Stephanie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 04:59 PM
Response to Original message
18. You're so wrong.
And you owe bartenders and waitstaff an apology. Restaurant workers are taxed on a percentage of their sales under the assumption that they are garnering about 13% of the net in tips, whether they make that or not. If a waiter rings up a takeout order under his ID number but there's no tip on it, the waiter is going to pay the tax anyway. Service workers get screwed bigtime on this. Check your facts, Will.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:05 PM
Response to Reply #18
22. OK.
I meant no offense - as stated above, I'm talking about good friends, and basing this on what they've told me - but I also may be dealing with a few unique situations, i.e. cash-only bars and restaurants. How do you tax cash like that? See post 7 re: credit card tips, that's clearly the deal...but if the place takes no cards, and the tips are all cash, I don't see how that gets reguated unless the bartender/waiter keeps a running tabulation and sends it to the IRS.
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Stephanie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:11 PM
Response to Reply #22
26. Well I'm wrong, it's 8% not 13% that they're required to report
The restaurant is required to account for 8% of sales as tips and allocate it to the appropriate employees. (I used to manage restaurants). So if sales are entered in a computer system they can allocate it precisely, otherwise it must be done by the management according to whatever formula they work out. Either way the waiter will pay, and it will come out of his $2.15/hr paycheck, so likely his check will be zeroed out. NOTE that the waiter is going to pay this tax whether he was tipped or NOT. So if the waiter is stiffed he still pays tax on 8% of that check. Is that fair?



http://www.irs.gov/businesses/small/industries/article/0,,id=98401,00.html


Reporting Tip Income - Restaurant Tax Tips

Tips your employees receive from customers are generally subject to withholding. Employees are required to claim all tip income received. This includes tips you paid over to the employee for charge customers and tips the employee received directly from customers.

Employee Requirements

Employees must report tip income on Form 4070, Employee's Report of Tips to Employer, (PDF) or on a similar statement. This report is due on the 10th day of the month after the month the tips are received. This statement must be signed by the employee and must show the following:

The employee's name, address, and SSN.
Your name and address.
The month or period the report covers.
The total tips received.
No report is required from an employee for months when tips are less than $20.

Both Forms 4070 and 4070-A, Employee's Daily Record of Tips, (PDF) are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer. (PDF)

Employer Requirements

Employers must collect income tax, employee social security tax and employee Medicare tax on tips reported by employees. You can collect these taxes from an employee's wages or from other funds he or she makes available.

Allocation of Tips

As an employer, you must ensure that the total tip income reported to you during any pay period is, at a minimum, equal to 8% of your total receipts for that period.

In calculating 8% of total receipts, you do not include nonallocable receipts. Nonallocable receipts are defined as receipts for carry out sales and receipts with a service charge added of 10% or more.

When the total reported to you is less than 8%, you must allocate the difference between the actual tip income reported and 8% of gross receipts. There are three methods for allocating tip income:

Gross Receipt Method
Hours Worked Method
Good Faith Agreement
Employers can request a lower rate (but not lower than 2%) for tip allocation purposes by submitting an application to the IRS. Detailed instructions for computing allocation of tips, reporting allocated tips to employees, and for requesting a lower rate can be found in the Instructions for Form 8027. (PDF)

Note: The amount shown as allocated tip income is for information purposes only. You are not required to withhold Income or Social Security taxes on the allocated tip income. The amount of tip income allocated to each employee is shown in box 8 of their Form W-2.

Tip Reporting Requirements for Employers

Employers who operate large food or beverage establishments must file Form 8027 (PDF) to report employee tip income. A large food or beverage establishment is defined as business where all of the following apply:

Food or beverage is provided for consumption on the premises
Tipping is a customary practice
More than 10 employees, who work more than 80 hours, were normally employed on a typical business day during the preceding calendar year.
A worksheet for determining whether a business meets the criteria listed above is included in the Instructions for Form 8027. (PDF)

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Warren Stupidity Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 06:53 PM
Response to Reply #22
38. Just read the 20 or so clear explanations here.
You should have done a little homework before just taking your friend's words for the literal truth.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 05:11 AM
Response to Reply #38
51. Remind me of that
the next time I listen to you.

:P
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Warren Stupidity Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 05:58 AM
Response to Reply #51
52. OK, when was the first time?
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 06:03 AM
Response to Reply #52
53. I already forget.
Where are we?
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October Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:05 PM
Response to Reply #22
41. Will, add to this...
There are a lot of waiters/waitresses who work "under the table." It's routine and I've known more than a few.

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AuntPatsy Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:02 PM
Response to Original message
20. I waited at one time as well, your little story is misleading since as others
have pointed out you still have to declare a certain amount even if you did not make such, as far as is this wrong if they do? I don't see it as wrong, I agree with another poster, if they were so worried about ensuring they get taxed properly than up their paychecks to an affordable wage earning venture if not either put up or shut up is how I look at it.

Not everyone are good tippers in fact some are downright cheapskates.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:05 PM
Response to Reply #20
23. See post 22.
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AuntPatsy Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:37 PM
Response to Reply #23
44. Gotcha, nine times out of ten I try to leave cash tips instead of credit card tips
strictly because I am aware how some people are with leaving tips and contrary to what the law states, one does not always get the percentage in terms with regard to ones food bill and the wait staff pays the price for that.

My sister in law who in her day was one of the best waitressess prided herself on such always went out of her way to give each and every customer full one hundred percent service and she herself many times got completely stiffed on any tip but sometimes ignorant people even left one penny, can you imagine?

My aunt is very well off but she is one of those that rarely if ever leaves a decent tip, in her mind she deserves full service without having to pay that extra, she is the type who wouldn't tip for someone who has given excellent service but in the same vein she is the first to complain if not given the royal treatment, I swear she honestly acts like such people are beneath her and she is not the only one, many I have known through the years feel indentical to her....


You just cannot make up those stories, they are out there. So it bothers me when people that work in that proffession don't get the credit they deserve when more times than naught they have to put up with such attitudes and are not able to say a word about it.
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superkia Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:09 PM
Response to Original message
24. To go along with the credit card tips, some restaurants charge...
a 3% fee to the servers that goes to paying their buss staff and host staff so the restaurant only has to pay all of their front of house employees about $3 per hour and the wait staff foots the bill, thats how most do it. So if a server gets stiffed they end up paying to serve the customer. I know that the bartenders make a killing in tips but most of your average restaurant wait staff doesn't even come close. I wouldn't be able to wake up and work a 4 hour shift to make $3x4=$12 plus $15= $27, keep in mind servers don't ever really get a check with money on it, its usually a couple of these **** because taxes eat up any hourly they usually get and at the end of the year allot of them owe taxes. I'm not sure how many people have been in the service industry lately but unless your a bartender or you serve tables in a high end restaurant, you deal with a bunch of shit for the pay you receive.

I don't think most Americans realize that they don't really get a check and they survive by tips alone. Most corporate run restaurants also have policies that dictate how many servers take care of larger parties, so if 2 or 3 people have a large party that takes up all of their sections for a few hours during the rush where they would usually make their money, all it takes is a bad tip on that large bill and they all walk with next to nothing for their whole shift. I think we can find other ways to fix the tax system before jumping in on this one.

If anyone thinks we should go to a base pay so they can be taxed correctly, good luck getting any service because the restaurants aren't going to foot the bill for a decent base pay.
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JuniperLea Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:14 PM
Response to Original message
28. Damn! I didn't get the memo stating it's "Hate on Pitt" day!!!
What the hell?
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:19 PM
Response to Reply #28
31. Nah.
That's Thursday.
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JuniperLea Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:36 PM
Response to Reply #31
35. Calendar is marked!
You better be ready, buddy boy... cuz I've got two and a half days in which to warm up my sharp hating skills! And I must say, I have me some mad hating skills;)

I have only a little to add to this particular convo... IMHO, it's a pity that tips must be reported to the IRS. No, the real pity is that people waiting tables aren't paid a living wage. The way I see it, if you claim your tips, you should stick 30% of them away so you can pay the taxes. It must suck come tax season, to be forced to come up with that money.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:22 PM
Response to Original message
32. I just asked the mods to lock this
My alert note:

Sorry to be a bother, but I'd be vastly grateful if you locked this. Either my logic motherboard misfired, I wasn't sufficiently clear with the details, or I didn't hear my friends correctly. This is pissing people off, and I didn't want to do anything like that. Thanks.

Apologies, folks. Sounded great in my head, but... :(
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Coexist Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:47 PM
Response to Reply #32
46. I wasn't angry - I was just confused.
I didn't want to sound mean - it just didn't sound like my experiences.
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ChavezSpeakstheTruth Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:04 AM
Response to Reply #32
64. Cool - see that's class!
I applaud you sir - and I'm not being sarcastic. :patriot:
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HiFructosePronSyrup Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:23 PM
Response to Original message
33. Box 7. Wages, salaries, tips, etc. Attach W-2.
I suppose your friends and others could be cheating on their taxes. I doubt that's most of them, or comparable to more well-to-do people who find other means to get out of their patriotic duty.
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JuniperLea Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 05:40 PM
Response to Original message
36. Oh... and they have to squeeze every cent out of the...
"Little guy" so they can keep the massive tax breaks for the people who make (not earn, make) the REAL money.
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TroubleMan Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 06:52 PM
Response to Original message
37. My wife, a waitress, is required to claim 10% of total food sales as tips on taxes.

So if her tables bought $100.00 of food, she'd had to report she made $10.00 worth of income in tips - and she gets taxed on it. If she gets more than 10%, then she's supposed to claim that, but that would be very hard to prove should she decide not to report it.

Most good waitresses make more than 10% (from what she tells me), though, so you're partially right on that point.
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Stephanie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 08:25 PM
Response to Reply #37
48. How much does she keep after she tips out?
I bet she tips out 30% of what she makes to busboys and bartenders.
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TroubleMan Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 09:07 PM
Response to Reply #48
50. No bartenders and no busboys.

The waitresses there bus their own tables, and there's no alcoholic bar (there's a bar but it's considered it's own table).

She became manager and just recently we decided that it's better for us if she's a waitress because it's a lot less hours and slightly more pay. The owners wanted to keep her as a manager, so now she's part time waitress and part time manager - so the pay is about the same but it's about 1/4 less hours. Also, the store where she is a waitress is about a mile from home, and the store where she manages is about 20 miles away. She also enjoys waitressing and hates managing.

Anyway, the percentage of food sold vs tips varies quite a bit. Sometimes it's as much as 75% and as low as 10% (just a guess on my part). There have been nights where she took in more dollars in tips than she sold in food, but those are very rare. I'm guessing she averages about 40%-50%, but it's just a guess.
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L. Coyote Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 06:54 PM
Response to Original message
39. Tip of the iceberg. There is much more underground economy. Cash is king.
Undocumented workers fuel an underground economy that evades income tax, social security tax, unemployment tax, workers compensation, safety training costs, minimum wage laws, safe workplace costs, and medical insurance and other benefits. The secondary impacts include wage suppression and unfair competition that drives down the taxes paid by law abiding workers and employers.
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Greyhound Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 08:36 PM
Response to Reply #39
49. Why do you think they've started the campaign to eliminate cash in earnest?
Just another long ignored warning some of us have been trying to get through to people.

But hey, we're all just paranoid crazy people. The government would never do anything to hurt us.



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Rex Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:01 PM
Response to Original message
40. The IRS lost 200 billion and George lost 2 trillion
and wants more so I guess gas and milk will be 5 dollars a gallon soon.

The Feds don't fund the infrastructure and leave the states the burden which goes back to the town and city. I think as the population grows, you will see 'service sector' jobs grow. Drowned out is the working class, by the wealthy. Same story told throughout history.
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October Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:19 PM
Response to Original message
42. You're not way off, as some have stated
My mother (and other relatives) have worked in various restaurants in a big city on the East Coast.

They were all different in how they handled payment, but other than my mother's tiny hourly paycheck, she was always paid her tips in cash. Yes, she had to report her income/tips to the IRS at some point when the law changed. HOWEVER, there are a lot of restaurants who pay "under the table." Certain wait staff are kept off the books. Maybe I'm missing something, but it's hard to believe a restauranteur would benefit that much by keeping a $2.15/hour employee off the books. It does go on. You're not the only one with friends who tell such tales.
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:38 PM
Response to Original message
45. Nice post
K & R
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waiting for hope Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-15-07 07:59 PM
Response to Original message
47. You also have to figure
that more than over half of these tipped service workers practically don't get a paycheck. I work at one establishment for 10 years, last six as the office manager and doing payroll for over 100 employees, I got to know the system fairly well. About two years before I left, the company (big franchise chain) started offering health insurance - non of the tipped employees could cover their portion from their bi-weekly check, so many opted out. Many are barely surviving, and they should make min. wage.
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blondie58 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 06:11 AM
Response to Original message
54. Yeah, all of these poor waitstaff cheating the government....
I have personal feelings about the IRS and tips for waittresses. Back in college, I was supporting myself by working at the Black Angus. Sure, money could be good and this was back before you really were expected to declare all of your tips. I pretty much did, though- it was easier that way. The IRS came in and audited our restaurant. They ESTIMATED what each waitress should have made, supposedly factoring in the people who stiffed you and the people who sat there for 2 1/2 hours. They slapped all of us with a past due tax bill, mostly interest and penalty. Most of us didn't keep detailed records back then, so we had no proof. If you tried to fight them, they would say, "okay, well lets look at 1983 also". This was before the newer allegedly friendlier IRS. They did it for two years and told me that I owed them about 5K. It was so unfair.
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Zuiderelle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 08:52 AM
Response to Original message
55. Every American should have to work as a waiter for a year.
What a load.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:00 AM
Response to Reply #55
57. Agreed.
I worked my first retail/counter job when I was 8, behind the snack bar at this run-down old public golf course. Age 13, I was still at the golf course but was slinging ice cream...then the video store...then Filenes for three excruciating Christmas-season weeks...more ice cream...ug.

Yeah, and I was a waiter at this nutbag seafood joint in Fanueil Hall. First day, I dumped a tin of hot melted butter on this guy's tan slacks. I could not have wrecked them any worse if I'd lit them on fire.

You can spot the people who've never worked those gigs. They are the ones who shit on the register-driver or the waiter or whomever is in front of them. You are correct: it should be compulsory...especially during Christmas season. To this day, if I hear even one half of one quarter of one note from 'Feliz Navidad,' I shit my intestines and burst into flame.

Well...not really. But fuck that song. 45 minute tape...on permanent loop...played through the speaker above my station...all throughout my 10-hour shifts...over...and over...and over again...

Anne Murray and her happy Christmas crap-song can fucking kiss off, too, now that I remember it.

:)
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Zuiderelle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:32 AM
Response to Reply #57
59. After reading your OP I would have pegged you as someone who had never worked as a waiter.
Color me surprised. My stints in the service genre made me a bit more sympathetic towards those who serve me. If they can manage to get any tips past the ever present eyes of the IRS, then more power to them. Forcing them to throughly declare all of their tip income would make far less of a dent in our tax problem than removing various and ridiculous tax shelters for the rich would do.

Sounds like something a conservative made up, like our system of welfare failing because of "welfare queens". Yes, our entire system of taxation is failing because of a few thousand, million, whatever... waiters. Not because we don't require them to be paid a fair wage in the first place. Of course not.

I don't know about you, but I wouldn't trade places with any one of your "friends" in the service industry, even if they cleared all of their tip money without taxation (which would be impossible).

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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:36 AM
Response to Reply #59
60. If you read upthread, you'll see where I blew it.
My perspective is skewed because most of the folks I know (and describe in the OP) work in cash-only bars and restaurants.

I left that fact out...which only deranged my whole concept and actually offended a few people. Which sucks rocks.

I asked the mods for a lock on this, but alas, no soap.

As for trading up with my friends, yeah, maybe...but I wouldn't hate to work behind the bar now and again. :)
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Zuiderelle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:40 AM
Response to Reply #60
61. You're right, I only read your OP.
I have only heard of cash bars at special events like weddings. I didn't know such things existed. But I stand by my not wanting to change places with them. Now and again standing behind a bar isn't the same as doing it every day for the rest of your days. We should go after prostitutes next. They're the ones that are really making a killing in the taxation department. :)
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:46 AM
Response to Reply #61
62. 900,000 college students arrive here every September
Edited on Tue Oct-16-07 09:47 AM by WilliamPitt
Cash cuts down on the bullshit...and really cuts down on the "WOOO SPRING BREAK" people, cuz they can't, like, drink on daddy's credit card and stuff... ;)

There are three cash-only joints within walking distance of my place. The best part is that cash-only attracts industry people, who are always a freakin' riot to drink with. Just last night, I tipped a beer with two waiters, a waitress and a cook. Laughed pretty much 72.5% of my ass off. :)

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Zuiderelle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:14 AM
Response to Reply #62
66. 900,000! I guess that does make for a different culture there.
I can see the merit in cash-only bars in that case. Makes me sympathize even more for the waitstaff around there though. A million snotty kids, yeesh.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:32 AM
Response to Reply #66
67. It can be pretty awe-inspiring.
Short list:

Art Inst: The Art Institute of Boston at Lesley University; independent; undergraduate and graduate; art

Babson: Babson College; independent; undergraduate and graduate; Babson Park (near Wellesley, Massachusetts)

BAC: Boston Architectural Center; independent; undergraduate and graduate; architecture; interior design

Bay: Bay State College; independent; undergraduate 2 year

Bentley: Bentley College; independent; undergraduate, graduate; Waltham

Berklee: Berklee College of Music; independent; undergraduate; music

BFIT: Benjamin Franklin Institute of Technology; independent; undergraduate

BC: Boston College; independent; undergraduate, graduate, and doctoral

Boston Cons: The Boston Conservatory; independent; undergraduate and graduate; music

BHCC: Bunker Hill Community College; state; undergraduate 2-year

Brandeis: Brandeis University; independent; undergraduate, graduate, and doctoral; Waltham

BU: Boston University; independent; undergraduate, graduate, and doctoral

Bridgewater: Bridgewater State College; state; undergraduate, graduate; Bridgewater

Cambridge: Cambridge College; independent; undergraduate and graduate

Dean: Dean College; independent; undergraduate; Franklin

Emerson: Emerson College; independent; undergraduate, graduate, and doctoral

Emmanuel: Emmanuel College; Independent Roman Catholic; independent; undergraduate and graduate

Fenway: Colleges of the Fenway Consortium; collaboration of six colleges: Emmanuel College,

Massachusetts College of Art, Massachusetts College of Pharmacy and Health Sciences, Simmons College, Wentworth Institute of Technology, and Wheelock College

Fisher: Fisher College; independent; undergraduate

Harvard: Harvard University; independent; undergraduate, graduate, and doctoral; Cambridge

Holy Cross: College of the Holy Cross; independent Roman Catholic (Jesuit); undergraduate; Worcester

Labouré: Labouré College; independent; undergraduate 2-year; medical

Lasell: Lasell College; independent; undergraduate and graduate; Newton

Lesley: Lesley University; independent; undergraduate, graduate, and doctoral; Cambridge

Mass Art: Massachusetts College of Art; state; undergraduate and graduate; art

Merrimack: Merrimack College; independent Roman Catholic; undergraduate and graduate; North Andover

MIT: Massachusetts Institute of Technology; independent; undergraduate, graduate, and doctoral; Cambridge

Mt Ida: Mount Ida College; independent; undergraduate; Newton Center

NE Art: New England Institute of Art; undergraduate; art and multimedia; Brookline

NE Cons: New England Conservatory of Music; independent; undergraduate, graduate, and doctoral

NE Finance: New England College of Finance; independent; undergraduate 2-year

NE Law: New England School of Law; Juris Doctor degree

Newbury: Newbury College; independent; undergraduate; Brookline

Northeastern: Northeastern University; independent; undergraduate, graduate, and doctoral

PMC: Pine Manor College; independent; undergraduate; Chestnut Hill

Roxbury: Roxbury Community College; state; undergraduate 2-year; Roxbury Crossing

Salem: Salem State College; state; undergraduate, graduate; Salem

Simmons: Simmons College; independent; undergraduate, graduate, and doctoral

SMFA: School of the Museum of Fine Arts; independent; undergraduate and graduate; art

Suffolk: Suffolk University; independent; undergraduate, graduate, and doctoral

Tufts: Tufts University; independent; undergraduate, graduate, and doctoral; Medford

UMB: University of Massachusetts--Boston; state; undergraduate, graduate, and doctoral

Wellesley: Wellesley College; independent; undergraduate; Wellesley

Wheaton: Wheaton College; independent; undergraduate; Norton

Wheelock: Wheelock College; independent; undergraduate and graduate

WIT: Wentworth Institute of Technology; independent; undergraduate
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endarkenment Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:39 AM
Response to Reply #60
69. You need to do some more fact checking.
Even a cash only business has to declare its income and its employee's income and while they can all cheat, they only can cheat by so much or the IRS will start taking a close look at their operations and somebody will get nailed for excessive cheating. The workers are going to get taxed on the assumed tip rate mentioned above.

here, google is a big help: http://www.irs.gov/businesses/small/industries/article/0,,id=98401,00.html

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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:44 AM
Response to Reply #69
70. Wow.
Did you and I just actually have...a polite exchange?

Excellent.

:toast:
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endarkenment Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 11:16 AM
Response to Reply #70
71. Actually no it seems we didn't.
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 11:33 AM
Response to Reply #71
72. Jeez.
Edited on Tue Oct-16-07 11:34 AM by WilliamPitt
You're where humor goes to die. In the rain. (yesss, hemingway reference :) )

If that was impolite by your standards, I shudder to think about what you endure whenever you go outside. Must be Hell on a cracker. A really impolite cracker...that tried to be happy and fun about a nice back-and-forth for once. In the rain. :P

:shrug:

I tried.
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lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 08:53 AM
Response to Original message
56. Underground economy, by any means necessary?
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youthere Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:05 AM
Response to Original message
58. When I was a kid, my mother was going to college to get her RN degree...
She worked weekends waitressing at a country club and it was nothing for her to bring home $300 a night in tips...and that was in the mid 70's. She made more waitressing there than she ever did as a nurse. But let me tell you, I remember she would come home absolutely exhausted and almost in tears from her feet, legs and back hurting so bad (that was when they made the waitresses wear heels all night). She made a lot in tips, but that certainly isn't the norm for service jobs like that.
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LoZoccolo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 09:52 AM
Response to Original message
63. They make a lot of money but only declare $2.15 business dollars. n/t
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WilliamPitt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 10:33 AM
Response to Reply #63
68. That's so weak compared to your other stuff.
I feel this weird sense of disappointment...

:freak:
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deaniac21 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Oct-16-07 05:19 PM
Response to Reply #63
73. That law changed on May 12.
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