Originally Posted by Gator Gal
Why not just add the extra 15, 18, whatever percent to the menu price? I'd rather pay a couple bucks extra for a meal included in the COST of the meal when it's imposed on me than to charge me the amount anyway under the "illusion" of a tip.
One reason may be the sales taxes (sales taxes might get worse based on discussions this week). Let's say you go out for dinner for 4, and have a $200 tab (no alcohol). If the restaurant builds an additional 15% into the price to pay the waiters more, the total subject to sales tax (on the consumer) is $230; in a state with a 5% sales tax, the additional tax would be $1.50. There may be other costs which increase as salaries increase. If so, the restaurant may have less profit unless the waiter didn't get 100% of the bump. Over many meals and many waiters, the amounts can be significant. I've wondered and don't know whether most states require manditory tips to be included in the amount subject to sales tax.