In a bid to woo voters and potentially boost the economy, former President Donald Trump has proposed eliminating taxes on overtime wages. He believes this will encourage people to work more hours and make it easier for businesses to hire. Speaking at a rally in Arizona, 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.”
While the proposal is attracting attention, it’s not without its critics. Economist Peter Schiff, in a comment on X (formerly Twitter), pointed out that many employees are unable to work overtime due to employers’ reluctance to pay time-and-a-half rates. This often leads employees to take on second jobs, working extra hours at lower rates for other employers. “Employees lose out due to unpaid travel time,” Schiff added.
Trump’s proposal has echoes of his earlier plan to end taxes on tipped wages. Critics argue that this, along with his proposal to eliminate taxes on Social Security benefits, could significantly inflate the federal deficit, adding an estimated $150 billion to $250 billion to the debt over the next decade for tipped wages alone, and an additional $1.6 trillion for Social Security benefits.
As the 2024 presidential election heats up, economic policies are becoming a key point of contention. Vice President Kamala Harris, the Democratic presidential nominee, has also weighed in on these issues, echoing Trump’s call to eliminate taxes on tips and proposing an increase in the minimum wage.
With both candidates vying for the White House, their economic visions will undoubtedly continue to be debated and scrutinized as the campaign unfolds. The debate over overtime tax exemption highlights the complex interplay between political promises, economic realities, and the potential impact on the nation’s budget.
