Authored by Katabella Roberts via The Epoch Times (emphasis ours),
Former President Donald Trump has said he plans to end taxes on overtime wages for individuals who work more than 40 hours a week if he is elected to the White House again.
Trump made the comments during a campaign rally in Tucson, Arizona on Sept. 12, telling the crowd that working class Americans deserve to “catch a break.”
“Today, I’m also announcing that as part of our additional tax cuts, we will end all taxes on overtime. You know what that means? Think of that,” the Republican said. “That gives people more of an incentive to work, it gives the companies a lot, it’s a lot easier to get the people.”
Trump said ending taxes on overtime wages would potentially generate a “whole new workforce” in the United States.
He went on to praise the hard work of police officers, nurses, factory workers, construction workers, truck drivers, and machine operators.
“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,” he continued.
Trump did not provide further details as to how the tax policy would work.
Currently, overtime income—which is defined as nonexempt under the Fair Labor Standards Act—is taxed at the same rate as standard income, and any change to the tax law requires an act of Congress.
Elsewhere during the rally in Tucson, Trump repeated his promise to end taxes on tipped wages and eliminate taxes on Social Security benefits.
The Republican has said on multiple occasions that he plans to scrap both taxes immediately after taking office if he were to win the presidential election in November.
Impact of Harris, Trump Tax Policies
Under current law, tips are considered normal income and subject to standard income tax law.
Meanwhile, around 40 percent of Americans who receive Social Security payments have to pay federal income taxes on those benefits, according to the Social Security Administration.
This typically happens for Americans who have “other substantial income” in addition to their monthly benefits, including wages, earnings from self-employment, interest, dividends, and other taxable income, according to the agency.
Currently, under federal law, retired individuals who earn less than $25,000 per year, or $32,000 for married couples, pay no taxes on their Social Security payments.
Vice President Kamala Harris, the Democratic nominee for president, has also called for similar proposals such as scrapping taxes on tips and Social Security benefits in recent months.
According to a Sept. 10 analysis from the Tax Foundation, Harris’s tax policies would raise $2.2 trillion of tax revenue from corporations and $1.2 trillion from individuals from 2025 through 2034.
The “economic harm from Harris’s tax hikes would also greatly reduce the ability to address an emerging debt crisis,” according to the Tax Foundation.
The same foundation noted that Trump is yet to release a fully detailed plan regarding his tax proposals but has “floated several tax policy ideas.”
His proposed tax cuts would decrease federal tax revenue over the 10-year budget window by $6.1 trillion on a conventional basis and by $5.3 trillion on a dynamic basis, according to the non-profit.
“Overall, Trump’s policies would reduce distortions in one part of the tax system, namely income taxes, only to replace them with new distortions in another part of the tax system, namely tariffs,” the foundation wrote. “The combination of policies under consideration risks shrinking the economy and growing the debt.”
Jack Phillips contributed to this report.
Tyler Durden
Sat, 09/14/2024 – 10:30
