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I've only ever lived in states that don't have state taxes, only federal. That said every place I worked when I was younger had people just lying about their tips by claiming they only made tips that came from cards and pocketed all their tips from cash and never reported it. As cash has slowly disappeared more and more I'm sure that is dying off but tips were never a good thing for society. They are "politically correct" bribes. Then when companies realize customers will bribe their workers to be more helpful they got greedy and started taking those bribes. To which we made laws about stealing their bribes, so they paid politicians to make minimum wage separate for commonly bribed positions, effectively making it legal to steal bribes from their workers.
Making a portion of jobs qualify to not be taxable in parts of their income and not others regardless of tax brackets would be unresponsible. We are complicating a system that doesn't need to be more complicated, and all that does is make more room for loopholes and exploitation (whether it be if the worker or of the taxes that should have been paid).
My experience talking with waitstaff friends mirrors yours.
They all swear they're getting the better end of the deal because they have good nights, but there's gotta be dead nights where they make nothing, and I can't imagine disability or unemployment is good when your wage is $2/hr.
To me it's passing the cost of labor onto customers in a less than transparent manner, and with wage theft by employers seeming to be a problem with restaurant staff, I don't know how you can prove stolen cash tips.
It varies, usually the ones I knew would make more money than those working back of house without an issue. Back of house would get paid say $10 an hour and work a 9 hour shift. Front would come in for 6 hours and leave with ~$150. Creating a natural divide between the two.