tipping with a credit card

[breakingnews]

Nothing really gets double-taxed in that instance. The restaurant will pay taxes on its bottom line (well, EBITDA = earnings before interest, tax, depreciation and amortization). That amount already accounts for general expenses, including payroll/wages. The money is handed over to employees before it's subject to any corporate taxes.

So, really, the whole sum of your $5 is taxed only once.

And of course post-tax tipping puts more money in the waiter's pocket since it's a higher amount. Just a matter of how much you want to leave and (again) whether the waitstaff declares it.

Edit: Of course, gross dollar transactions are subject to merchant transaction fees, if paid by credit card. I don't know if there are any tax implications there, but I doubt it.