Thailand does not have the same tipping culture as USA. Some people have pride and will be insulted by such a large tip. Imagine tipping a dentist in the US.
It is purely a racist term. I was at the bank today asking for a mortgage, as I am a Thai citizen. The staff, who had my Thai ID in hand, phoned their head office and came back saying I needed a Work Permit if applying for a loan as I am farang!