Restaurant Economics

What is my "fair share?"

Is it my moral and civic obligation to take from my pocket to supplement the lack in another's?

These, and other similar questions, are floating around. Recently, a wealthy man named Warren Buffett even wrote an op/ed giving his opinion that the federal government should stop "coddling the mega-rich."

When you don't have a much it is great to think about how the "rich" might be forced to give up part of what they have to give you more, but few people think about what redistribution means in real life. So, in an effort to inject a little reality into the issue I have decided to write a post about how "fair share" might look if it was imposed where I work as a waiter.

Let us pretend that tomorrow the management came to all the servers and informed us that it had come to their attention that there was often a large discrepancy between the highest and lowest earning server each night and that that a new "fair" system was going to be put in place to correct this.

This new system would require all the servers to pool their tips at the end of the night so that the could be redistributed more evenly.

But what is the best way to divide the tips?

If they are divided based on production (total sales) it is unlikely that the outcome will be much different than letting each server keep their original tips.

Should the tips be divided based on need?

If so, do I get more than a single person simply because I have a wife and two children? Would someone get more because they chose to live in a more expensive apartment/house? How do we keep everyone from artificially inflating their need in order to get a bigger piece of the tip money? Would we all have to divulge our personal finances in order to assure the tips are distributed appropriately? Would the group of servers have a say in my personal money matters since they are paying for my financial choices?

And then there is the question of honesty and integrity. What if people start finding loopholes to reduce the amount they pay into the tip pool or increase the disbursement they receive?

As you can see, the new system quickly adds a great deal of complication that would require massive oversight. So we may have to take a portion of the tips to pay someone to be responsible for managing the new system; since it would be unfair to ask someone to take on such a task without compensation.

But now the distributions to each person are even smaller because of the money paid to the manager. And as the pay-outs got smaller more servers would likely find ways to cheat the system, requiring more managers at a further expense to the tip pool.

What if the tips were distributed simply based on hours worked?

How then would we ensure that members of the team gave their full effort to serve the guests and generate tips for the pool?

How does the group address a server that is under-performing because they know it will not effect their pay?

Does the group reward a server that is working hard to increase the tips they add to the pool?

I can tell you right now what the response would be if the servers were told tomorrow that they had to pool their tips. Let's just say it would make the recent riots in the U.K. looks like a bunch of Boy Scouts sitting around a campfire singing "Kumbaya."

But isn't this "pooling" essentially what is happening on a larger scale with our current tax system?

The bottom 47% of wage earning Americans pay no federal income tax yet receive the most from the government in the form of aid. The aid is disbursed based on need, so some have found ways to increase their need without increasing their contribution to the system.

Those that produce on a high level are expected to subsidize those who produce on a lower level, or even those who don't produce at all.

According to the National Taxpayer's Union, in 2008 the top 1% of tax payers in America accounted for 38.02% of federal income tax revenue. The top 5% of tax payers in America accounted for 58.62% of federal income tax revenue.

Now explain to me how it is fair that we ask the top 5% of the nation to pay nearly 60% the taxes.