Former President Donald Trump has announced a new proposal that aims to eliminate federal income taxes on overtime pay. He shared this idea during a speech in Tucson, Arizona, on Thursday. Trump’s proposal suggests that workers who earn overtime pay should not have to pay federal income taxes on those extra earnings. He believes this change would benefit many employees who work beyond their regular hours, making their additional income more rewarding.
This plan is part of Trump’s broader vision for tax reform, aiming to ease the financial burden on American workers and provide more incentive for those who put in extra hours on the job. Trump stated, “The people who work overtime are among the hardest working citizens in our country and for too long no one in Washington has been looking out for them.”
Trump further stated at a rally in Tucson, Arizona, “I’m also announcing that as part of our additional tax cuts, we will end all taxes on overtime. That gives people more of an incentive to work. It gives the companies a lot — it’s a lot easier to get the people.”
BREAKING: Donald Trump announces that he will ban taxes on overtime work if elected president to incentivize hard workers.
— Collin Rugg (@CollinRugg) September 12, 2024
"I am also announcing that as part of our additional tax cuts, we will end all taxes on overtime."
Under the plan, anyone who works over 40 hours a week… pic.twitter.com/HzFKaEh1hR
In his recent speech, former President Donald Trump proposed a plan to make overtime pay tax-free for workers who put in more than 40 hours a week. He emphasized that under his plan, “your overtime hours will be tax free.”
As of now, the Trump campaign has not provided additional details about how this proposal would be implemented or its potential impact. This plan aims to support workers by ensuring that their extra hours are fully rewarded without the burden of federal income taxes.
During his speech, former President Donald Trump mentioned that “great” economists have expressed their support for his proposal to make overtime pay tax-free. He quoted these unnamed experts as saying it would be “unbelievable” and could lead to a “whole new workforce.” Trump emphasized that those who work overtime are among the hardest-working citizens in the country, suggesting that this change could greatly benefit and motivate them.
In 2019, the Trump administration introduced a rule that expanded overtime pay eligibility to 1.3 million additional U.S. workers. This rule raised the salary threshold for exemption from overtime pay to $35,568 a year, up from the previous $23,660. This adjustment replaced a more generous proposal made by former President Barack Obama, Trump’s Democratic predecessor.
Workers’ rights groups criticized the Trump administration’s rule, arguing that it covered significantly fewer workers compared to the scheme introduced under Obama. Critics felt that the new threshold did not go far enough in protecting workers and providing fair compensation for their extra hours.
Trump’s proposal would be a pioneering move for the federal government, as it aims to eliminate federal income taxes on overtime pay for the first time.
