Donald Trump has done it again. During a rally on Thursday, September 12, the former president announced yet another anti-tax. If elected, he promises to try to eliminate taxes on overtime pay. Hourly workers nationwide cheer that idea. Democrats call it a lie and a desperate plea for votes after a weak debate performance. But true or false, doable or not, and regardless of his motivation for making the campaign promise, there’s no denying the genius of the move.
Presidential Campaigns Working Overtime
“We will end all taxes on overtime,” Trump said Thursday in Tucson, AZ. “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.”
Democrats fired back by questioning his motives and integrity. Joseph Costello, a Harris Campaign spokesman, said Trump is “desperate and scrambling and saying whatever it takes to trick people into voting for him.” The campaign considers this Trump’s “latest snake oil sales pitch.” Sen. Ron Wyden (D-OR) called the proposal “as fake as his tan.” The Senate Finance Committee Chair said in a statement that Trump knows congressional Republicans won’t pass such changes. “It’s obvious his newfound concern for working people is a fraud,” Wyden continued.
But even if Trump were lying about his intention to end income tax on overtime – and even if he only made the suggestion as an act of desperation after losing the debate, pushing more and more tax breaks for working-class Americans would still be a genius plan. Note the Democrats aren’t attacking the idea itself. The wealthy elite, the group Democrats say should “pay their fair share,” aren’t working for hourly wages and logging overtime. It’s the poor and the middle class – the very people Democrats claim to support. In targeting a tax the rich are already exempt from, Trump leaves the left with no ideology to vilify.
When the former president first suggested ending taxes on tips, the Harris campaign eventually copied the idea. When the Trump campaign suggested increasing the child tax credit, Kamala quickly made her own proposal to do so. He suggested Social Security benefits shouldn’t be taxed. Now, 45 says he’ll eliminate overtime taxes if he becomes 47 – what choice do Democrats have but to follow suit? At the very least, Harris can’t be seen as opposing this.
But What If It’s Real?
Now, imagine for a moment that Trump isn’t lying and that Congress will work with him to make it happen. It only takes a paycheck or two of overtime for most workers to figure out exactly how far they can push it without jumping up a tax bracket and losing money. And once that limit is found, it's never willingly crossed again.
Making overtime tax-exempt pay – and don’t forget, standard overtime is 1.5 times an employee's regular wage – would encourage workers even more to put in the extra hours. Trump said some economists told him the results would be “unbelievable.” Consider the boost to production across nearly all industries employing hourly wage earners. unbelievable indeed - talk about jump-starting the economy!
Yes, the government would lose some tax revenue directly. However, any increase in overtime hours due to its tax-free status can’t be counted in that deficit, as it wouldn’t exist without the change. And, of course, even if workers aren’t paying as much in taxes, they are making more money for themselves and the companies that employ them. Those businesses, as well as places where the workers spend their additional cash, end up with a higher taxable income, recouping much of that “loss” of revenue.
By pushing no taxes on tips, Social Security, or overtime, and by promising to increase the child tax credit, the Trump team is keeping the pressure on Democrats to meet or beat them. Even if Republicans don’t mean it and aren’t actually going to try to keep these promises, it still locks the two major parties into a race to see who can vow to eliminate more taxes for the poor and middle class. And simply matching Trump makes Kamala Harris and the Democrats look reactive rather than active. To really win in this war, she’ll have to promise more. And, as Liberty Nation News Senior Political Analyst Tim Donner once pointed out, there isn’t much a voter is more likely to remember come election day than the politician who promised to cut taxes, got elected, and then did the opposite. For that reason alone, Trump’s plan is pure genius.
Now, imagine the economic possibilities should he actually pull it off.
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