Cash is better for that reason in the USA.

(IANAL.) You're missing their point. The person above you is referring to the practice (and I've read about this any number of times in these discussions) that the business pockets the tip: the person you are tipping, effectively and in some circumstances, never receives it. This derives from the usual definition of their wage:

> A tipped employee engages in an occupation in which he or she customarily and regularly receives more than $30 per month in tips. An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage. If the employee's tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference.

(US Dept. of Labor: https://www.dol.gov/general/topic/wages/wagestips)

Say, within an hour, I receive a meal. I decide to choose between tipping $0 or $4; the result of which is:

  I tip $0: The business pays $7.25 for the hour of work; the employee gains $7.25
  I tip $4: The business pays $3.25 for the hour of work; the employee gains $7.25

So what was the point? That's not a tip, that's a business subsidy.

That tips are taxed … yeah? so? The Man gets his cut, always.

In that case it's better to tip with the card so the money is taxed correctly. Taxes are necessary and everyone involved in providing the service should have a cut of the tip.

You're right that it's better to pay a tip with cash.

The part that's iffy is what happens afterward. If it's as simple as handing a bill to someone who has helped you out, great, that's the ideal. But if that person is required to pool that money (for example - a restaurant might require servers to pool tips, cash or credit, so that busboys and the kitchen get a cut) there's probably no avoiding the shenanigans the restaurant's management might engage in.