Tack on one more to Trump’s tax-cut pledges: No tax on overtime pay

Sep 13, 2024

Simone Del Rosario Business Correspondent

By Simone Del Rosario (Business Correspondent), Brent Jabbour (Senior Producer), Jack Henry (Editor)

Former President Donald Trump said on Thursday, Sept. 12, he would add another tax cut to his agenda if elected to the White House in November. This time, the Republican nominee pledged to eliminate taxes on overtime pay.

Bias Distribution Powered by Ground News™

“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 said during an event in Tucson, Arizona. “Those are the people that really work. They’re police officers, nurses, factory workers, construction workers, truck drivers and machine operators.”

Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.

Point phone camera here

The latest proposal to cut taxes on overtime pay joins his pledges to cut taxes on Social Security benefits and abolish taxes on tipped income, an idea embraced by his opponent, Vice President Kamala Harris.

For its part, the Harris campaign called the proposal a ploy to win over voters reliant on overtime income.

“He is desperate and scrambling and saying whatever it takes to try to trick people into voting for him,” Harris campaign spokesperson Joseph Costell said in a statement.

Before the former president suggested he would slash taxes on overtime, Harris claimed he had “blocked overtime benefits from millions of workers” while he was in the White House.

Under former President Barack Obama, the Labor Department proposed raising the threshold for overtime exemption to $47,476 from $23,660, which would have made millions more workers eligible for overtime pay. The Trump administration was able to change it to $35,568, short of what Democrats were hoping for.

Under President Joe Biden, the overtime threshold was raised to $43,888 in 2024 and starting Jan. 1, 2025, it increases to $58,656, meaning anyone making less than that must make overtime pay after 40 hours of work.

It is unclear at this time how much revenue the government brings in on overtime pay each year. But there has been plenty of analysis on his other proposals.

Extending the Trump tax cuts for the next 10 years would add $4.6 trillion to the national deficit, according to the nonpartisan Congressional Budget Office. Ending taxes on Social Security benefits would add between $1.6 trillion and $1.8 trillion through 2035, according to the bipartisan Committee for a Responsible Federal Budget. And no taxes on tips would reduce federal revenues by between $150 billion and $250 billion over 10 years, according to CRFB estimates.

Trump has previously said his tariffs would pay for his tax cuts. The CRFB has estimated that a 10% across-the-board tariff would raise $2.5 trillion over 10 years, while a 60% tariff on Chinese goods would, on its face, generate $2.4 trillion, but over time, would produce far less revenue or even lose revenue once trade behavior changes due to the massive penalties of trade with China.

Tags: 2024 Elections, Barack Obama, China, Committee for a Responsible Federal Budget, Donald Trump, Joe Biden, Kamala Harris, Social Security, Tariff, Tax cuts, Taxes, Trade, U.S. Congressional Budget Office

Simone Del Rosario:

Add one more to Donald Trump’s tax cut pledges.

At a rally in Tucson, the former president said he would eliminate tax on overtime pay.

Donald Trump:

“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. Those are the people that really work. They’re police officers, nurses, factory workers, construction workers, truck drivers and machine operators.”

Simone Del Rosario:

No tax on overtime joins his proposals for no taxes on tips, an idea his opponent supports, and no tax on social security benefits.

Donald Trump:
It’s time for the working man and woman to finally catch a break and that’s what we’re doing.

Simone Del Rosario:

A Harris campaign spokesperson says Trump “is desperate and scrambling and saying whatever it takes to try to trick people into voting for him.”

Kamala Harris:
As President, we will always remember Donald Trump blocked overtime benefits from millions of workers.

Simone Del Rosario:

What’s she talking about there?

For a long time, the threshold where people could be exempt from overtime pay was pretty low, $23,660.

Under former President Barack Obama, the Labor Department proposed raising it to $47,476, which would have made millions more workers eligible for overtime pay.

When Trump took office, he changed it to $35,568. An improvement, but not as high as Democrats wanted.

Under President Joe Biden, this year they raised the overtime threshold to $43,888 and starting January 1, it goes to $58,656, meaning anyone making less than that must make overtime pay after 40 hours of work.

It’s hard to know how much the government makes from taxes on overtime pay, but here’s the price tag on some of Trump’s other proposals.

Extending the Trump tax cuts for the next 10 years would add $4.6 trillion to the national deficit, according to the nonpartisan Congressional Budget Office.

Ending taxes on social security benefits would add another $1.6 trillion to $1.8 trillion through 2035, according to the bipartisan Committee for a Responsible Federal Budget.

And no taxes on tips would reduce federal revenues by $150 to $250 billion over 10 years, CRFB estimates.

Trump has previously said his tariffs would pay for his tax cuts. CRFB has estimated that a 10% across-the-board tariff would raise $2.5 trillion over 10 years, while a 60% tariff on Chinese goods would, on its face, generate $2.4 trillion, but over time, would produce far less revenue or even lose revenue once trade behavior changes due to the massive penalties of trade with China.

When independent analysts put price tags on campaign promises, we bring that information straight to you. Download the Straight Arrow News app and enable notifications so you get these types of stories that help inform your vote.