During a Tucson rally, Donald Trump pledges to cut taxes on overtime pay if re-elected, adding to his broader tax-cut proposals that critics warn could deepen U.S. Deficits

In a high-profile campaign event on September 12, 2024, at the Linda Ronstadt Music Hall in Tucson, Arizona, former President Donald Trump unveiled his latest economic promise: eliminating taxes on overtime pay. This proposal is part of a broader set of tax cuts aimed at appealing to working-class voters in the run-up to the 2024 presidential election.

Trump’s announcement is a notable addition to his extensive tax cut agenda, which also includes plans to eliminate taxes on tips and Social Security benefits for seniors. The former president argues that removing taxes on overtime will incentivize more work and make it easier for companies to attract employees. “That gives people more of an incentive to work,” Trump asserted, emphasizing that hardworking Americans who put in extra hours deserve better treatment.

The promise comes amid a contentious election season and marks Trump’s first rally since his recent debate with Vice President Kamala Harris. Tucson, a battleground state he lost in the 2020 election, was chosen for the announcement to bolster his appeal in key electoral areas.

However, Trump’s proposal to eliminate taxes on overtime pay has sparked significant debate. Critics point out that the former president’s track record on overtime pay raises concerns about the feasibility and sincerity of his new pledge. During his previous term, Trump blocked regulations introduced by the Obama administration designed to expand overtime protections to millions of workers. This decision, critics argue, undermines his current promise.

Economist Heidi Shierholz from EPI Action expressed scepticism about Trump’s latest plan. She noted that Trump’s previous actions contradicted his new proposal. “While president, he stripped overtime protections from millions by refusing to defend an overtime regulation,” Shierholz said. “His record suggests a deeply anti-overtime agenda.”

Trump’s current tax proposals, including the elimination of overtime taxes, are projected to significantly impact U.S. fiscal policy. According to a Reuters review of four leading budget forecasters, Trump’s tax cut plans could add between $3.6 trillion to $6.6 trillion to U.S. deficits over the next decade. This projection raises concerns about the long-term sustainability of his economic policies and their potential impact on national debt.

Analysis

Political: Trump’s latest tax proposal is a strategic move to reinforce his appeal among working-class voters. By targeting overtime pay, a common concern for many American workers, he aims to present himself as a champion of the average worker. This approach is designed to contrast with his record on overtime regulations during his first term and to differentiate himself from his rivals in the 2024 election.

However, the proposal’s political effectiveness may be undermined by Trump’s past actions and the substantial cost associated with his tax cuts. Critics may use his previous stance on overtime pay to argue that his current promises are insincere or unrealistic. The debate over the feasibility and impact of these proposals will likely be a significant issue in the upcoming election.

Social: Trump’s pledge to eliminate taxes on overtime pay resonates with many working-class individuals who see it as a benefit that acknowledges their extra efforts. By framing the proposal as a reward for hard work, Trump taps into a broader narrative of supporting the hardworking American worker.

Yet, this promise also reflects broader social debates about income inequality and worker rights. Trump’s approach might be seen as a band-aid solution rather than addressing the systemic issues affecting wage growth and labor rights. Socially, it highlights a tension between immediate tax relief and long-term structural changes needed to support workers comprehensively.

Racial: The impact of Trump’s tax proposal on different racial groups could be complex. While eliminating taxes on overtime pay might benefit workers across racial lines, the broader context of Trump’s economic policies and previous actions could affect how these benefits are perceived. Historically marginalized communities, who often work in lower-wage jobs and may rely on overtime pay, might see some advantages, but they could also face scepticism about the long-term benefits of Trump’s overall economic agenda.

Gender: Gender disparities in the workforce, such as the gender pay gap and differences in access to overtime opportunities, could influence the impact of Trump’s proposal. Women, who are often overrepresented in lower-wage jobs and may have less access to overtime, could potentially benefit from the tax cut. However, the effectiveness of this policy in addressing broader gender wage gaps remains questionable. Trump’s previous actions and broader economic policies will likely shape the perceived effectiveness of this new promise.

Economic: The economic implications of Trump’s plan to eliminate taxes on overtime pay are significant. The proposed tax cut, while popular among some voters, could add between $3.6 trillion to $6.6 trillion to U.S. deficits over a decade. This substantial cost raises concerns about the sustainability of Trump’s tax policies and their impact on the national debt.

Moreover, the broader economic context includes Trump’s previous tax cuts, which have already contributed to significant budget deficits. Critics argue that his new proposals may exacerbate fiscal challenges without providing a clear plan for managing the resulting deficits. The debate over these economic policies will be crucial in assessing their long-term impact on the U.S. economy.