TAXES: The Real Rich

Tipping is a formidable institution, and nowhere is it more slavishly and generously served than in Manhattan, where it costs 25¢ minimum to redeem a hat from a hat-chick, vastly more to ensure a second well-served meal from a Cadillac-owning waiter. Last spring the worst suspicions of tipping’s intimidated victims—the customers—were confirmed when Hans Paul, headwaiter at Manhattan’s Waldorf-Astoria, was sent to prison; over four years, the Government charged, Headwaiter Paul had evaded payment of $67,070 in taxes—all due on tips. Last week another headwaiter—Hans Paul’s successor—was in similar trouble. The Internal Revenue Service charged in an indictment that the Waldorf’s Arthur Hagedorn, 54, whose salary is $3,000 a year, made at least an additional $30,000 a year in tips, had evaded income taxes of $11,781 in two years. Although few others could, Internal Revenue men had obviously caught the waiter’s eye.