Askume, Sep 12 – U.S. Republican presidential candidate Donald Trump said on Thursday that if elected in the Nov. 5 election, he would eliminate all overtime taxes as part of a sweeping tax cut plan.
“As part of this additional tax cut, we will eliminate all overtime taxes,” Trump said at a rally in Tucson, Arizona. “Your overtime is tax-free.”
Trump, who is facing Democratic Vice President Kamala Harris , has previously said he would seek legislation to eliminate the tax on tips paid to help workers . Harris made a similar pledge .
“She is desperate and will say anything to trick people into voting for her,” a Harris campaign spokesperson said Thursday in response to Trump’s suggestion.
At a campaign event with union activists this month, Harris accused Trump of “preventing” millions of workers from working overtime during his 2017-2021 presidential term.
In 2019, the Trump administration enacted a rule that expanded overtime pay eligibility to an additional 1.3 million American workers, replacing a more generous proposal from Trump’s Democratic predecessor, President Barack Obama.
The Trump administration raised the overtime-free pay level to $35,568 per year from the long-standing level of $23,660. Labor rights groups criticized the move, saying it would cover far fewer workers than the program introduced under Obama.
Under Obama, the Labor Department proposed raising the threshold above $47,000, which would make about 5 million workers eligible for overtime. The rule was later struck down by courts.
Overtime pay at these income levels primarily benefits blue-collar workers such as fast food workers, nurses, store clerks, and other low-income workers.
“People who work overtime are some of the hardest working citizens in our country, and for a long time nobody in Washington paid any attention to them,” Trump said Thursday.
According to Labor Department rules, eligible employees must receive at least half-hourly pay if they work more than 40 hours per week.
Data from the U.S. Bureau of Labor Statistics shows that as of last month, non-managerial workers in U.S. factories worked an average of 3.7 hours of overtime per week.
The nonpartisan Congressional Budget Office said not taxing overtime would reduce government revenue at a time when Trump’s plan to permanently extend the tax cuts passed as president would increase the US deficit to $3.5 trillion in 2033. The US budget deficit for 11 months of this fiscal year was $1.9 trillion.
It is unclear how much revenue the government receives from overtime taxes.
Trump’s proposal would be the first from the federal government. Alabama this year became the first temporary measure to exclude overtime pay for hourly workers from state taxes, gaining legislative support to help employers fill positions in a tight labor market. The exemption lasts only 18 months.
