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Who actually sets the "standard" tip amount?
There is not a central authority for this. Usually, people just google it. and someone tells them 15 to 20 percent of the pretax bill. Or, however much you think will avoid pissing off your server, maid, hair dresser, etc. So you set the amount.
What is the "standard" tip?
15 to 20 percent depending on who you are tipping. And, the list of those positions that you tip is growing. This is the US standard, which varies from state to state. European and Asian countries are a different world when dealing with tipping.
When did tipping start?
According to Wikipedia, in 1700 Europe. The article is fairly straight forward. I get the impression that it started out as a way to reinforce class status. There are some good arguments out there that tipping is still an expression of class dominance. Given the behavior of customers in restaurants, I believe that is the case.
Where does tipping occur?
It's cultural. Usually in cultures strongly with strong European influences. Apparently, it is not as common in cultures with less influence from western cultures. Oddly, I have heard that Europeans tip less than the 15 to 20 percent common in the US. 5 to 10 percent is the usual there.
Why is the "standard" tip going up?
I don't have a clue. In the Texas restaurant industry servers are paid 2.13 dollars an hour and tips make up the difference in wages, Also, there is a 80/20 percent rule in which duties that do not involve serving is limited to twenty percent. I suspect that rule is not always respected. So, I'm assuming that the standard tip is going up because the industry can't keep servers for less. Oddly, California has a minimum wage of 14 dollars and hour plus tips - depending on the city involved. So, tipping is not necessary to run a restaurant.
How is it done?
You leave cash on the table. Sometimes it gets divided with the kitchen.
Yeah, right. Most servers scream bloody murder when the idea is brought up. On average, with tips, they make 19 to 25 dollars an hour in the US. The kitchen staff was around 12 to 16 dollars when I was working in a kitchen this summer.
Summary
Tipping is an ill defined practice, highly dependent on a customer base with money and status. It is imbedded in various tax codes in the US, which seems to merely complicate our understanding of how the service industry is paid.