Republican US presidential candidate Donald Trump says he will end all taxes on overtime pay as part of a wider tax cut package, if he wins the November 5 election.
"As part of our additional tax cuts, we will end all taxes on overtime," Trump told a rally in Tucson, Arizona. "Your overtime hours will be tax-free."
Trump, who faces Democratic Vice President Kamala Harris in what polls show to be a tight race, has previously said he would seek legislation to end the taxation of tips to aid service workers. Harris has made a similar pledge.
The subject of overtime has recently become a campaign issue between Trump and Harris.
At a campaign event this month with union workers, Harris accused Trump of "blocking" overtime from millions of workers during his 2017-2021 presidency.
In 2019, the Trump administration issued a rule increasing the eligibility of overtime pay to 1.3 million additional US workers, replacing a more generous proposal that had been introduced by President Barack Obama, Trump's Democratic predecessor.
The Trump administration raised the salary level for exemption from overtime pay to $35,568 a year, up from the long-standing $23,660 threshold. Workers’ rights groups criticised the move, saying it covered far fewer workers than the scheme introduced under Obama.
Under Obama, the Labor Department proposed raising the threshold to more than $47,000, which would have made nearly 5 million more workers eligible for overtime. That rule was later struck down in court.
Overtime pay at these income levels overwhelmingly benefits blue-collar workers, such as fast-food workers, nurses, store assistants and other low-income employees.
"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," Trump said on Thursday.
As of last month, American factory workers in non-supervisory roles put in an average of 3.7 hours of overtime a week, data from the Bureau of Labour Statistics shows.
Not taxing overtime would result in less government revenue, at a time when Trump's plan to permanently extend the tax cuts he passed as president would expand the US deficit by $3.5 trillion through 2033, according to the non-partisan Congressional Budget Office. The US budget deficit in the first 11 months of this fiscal year is $1.9 trillion.
It's unclear how much revenue the government receives from taxes on overtime pay.
Trump's proposal would be a first for the federal government. Alabama this year became the first state to exclude overtime wages for hourly workers from state taxes as a temporary measure that won legislative support in part to help employers fill jobs in a tight labour market. The exemption is for 18 months only.
Meanwhile Trump says he will not participate in another presidential debate against Harris ahead of the US election.
"THERE WILL BE NO THIRD DEBATE!" the former president wrote on social media site Truth Social. Trump had participated in a debate against President Joe Biden in June before his debate against Harris on Tuesday.
While Trump said in his post that polls showed he won the debate, several surveys showed that respondents thought Harris did better.
Among voters who said they had heard at least something about Tuesday's debate, 53 per cent said Harris won and 24 per cent said Trump won, according to a Reuters/Ipsos poll released on Thursday.
Harris, speaking at a rally shortly after Trump's post went live, said: "I believe we owe it to the voters to have another debate."
