No Tax On Overtime Proposal by Donald Trump: What you need to know

Mixed reactions

The proposal has received mixed reactions from industry professionals, labor advocates, and economists.

Ryan Hughes-Svab, co-owner of The Misfit Lou restaurant and bar, told USA Today:
“I think it could help a lot of people. But I also see potential downsides. There’s a tipping culture in the U.S., and some large companies might exploit this by lowering base wages and relying more on tips to compensate workers.”

Ted Pappageorge, secretary-treasurer of the Culinary Union, emphasized the need for broader labor reforms, stating:
“Eliminating taxes on tips should be part of a larger plan to address the high cost of living for working families. This includes ending the $2.13 sub-minimum wage for tipped workers and tackling corporate price gouging in food, gas, and housing.”

Additionally, Representative Steven Horsford has introduced legislation to eliminate the federal income tax on tips while also pushing for the abolition of the sub-minimum wage for tipped employees. He argues that these measures would benefit millions of low-income workers across the country, particularly in states like Nevada.

Trump’s No-Tax-On-Overtime proposal aims to provide financial relief to workers by reducing their tax burden on overtime pay, tips, and Social Security benefits.

While supporters view it as a way to increase workers’ earnings and stimulate the economy, critics warn of potential unintended consequences, such as shifts in employer pay structures and economic imbalances in certain industries. As the debate continues, the impact of these proposed tax changes remains a key issue in discussions on labor policy and economic growth.