president Donald Trump He renewed his call for tax cuts, including canceling taxes for additional work and advice. Talk to CongressAnd he urged legislators to support what he described as relief that is needed for workers.
His proposal raised discussions about his feasibility, economic impact and possible consequences for both employees and government revenues.
During his speech, Trump declared: “I do not call for any tax on advice, no tax on additional work, and no tax on the advantages of social security for our elderly.”
Setting the plan as part of its broader tax strategy that aims to reduce the financial burden on workers and retirees, especially in light of inflation concerns.
How does taxs work to additional work?
Under the tax law in the United States, additional work wages are dealt with as regular income and subject to federal and state taxes. The FLSA Law on the Law of Flsa (FLSA) is imposed that uncomfortable employees who work for more than 40 hours per week receive at least 1.5 times their wage. However, these profits remain fully tax under the instructions of the current Tax Authority.
Alex Brandon/AP Photo
The Trump plan suggests making the additional work exempt from taxes, allowing workers to keep more profits. He said that this change would motivate employees to take additional hours without paying attention to the additional tax burdens.
“People who work additional work are among the most difficult citizens working in our country and for a very long time, no one in Washington was looking for them,” Trump said during the campaign march in September 2024.
How is taxes imposed on advice?
Under the rules of the current Tax Authority, advice is a taxable income. Employees who receive more than 20 dollars per month should notice them, and ask employees of employers to block taxes on income and salaries accordingly (the Tax Authority). Both employees and employers pay parts of social security and medical care taxes on the reported advice.
Trump initially suggested removing federal taxes on tips in June 2024, claiming that he obtained the idea from a waitress at his hotel in Las Vegas. “Trump said at the time, for those working in the hotel and people who get advice, you will be very happy, because when I reach the office, we will not impose taxes on the tips, and the people who provide advice … We will do it immediately, the first thing in the office.
Supporters of the plan argue that workers who are somewhat below the minimum standard wages – will benefit greatly from maintaining more profits. However, critics warn that exempting advice from taxes can create gaps that may lead to the restructuring of wages, and may benefit from employers instead of employees.
Economic analysts estimate that tax disposal on additional work wages alone can reduce government revenue from $ 250 billion to $ 1.4 trillion during the next decade. If the exemption extends to all qualified workers to obtain tax reduction, the revenue loss may reach $ 5 trillion.
What next
While the US House of Representatives has agreed to the budget decision in line with Trump’s tax priorities, this measure does not yet contain a specific political language that cancels taxes on additional work or advice.
The decision is a general guideline instead of binding legislation, which “does not provide funding for federal programs or change the tax law,” according to the Congress Budget Office. Senate Republicans She also expressed fears about the proposal, especially with regard to its impact on government revenues and entitlement programs.
Experts remain divided into the long -term effects of the plan. Alex Ben, Coach of Financial Literacy at Tennessee University in Martin, He said Newsweek The tax-exempt additional work policy will not only appeal to workers who gain additional income-it also becomes a strategic tool for employers, which helps them stimulate additional work among their employees.
He said: “The only question is whether Congress will be enthusiastic about the suggestion, especially at a time when more focus is given to national debts.”
Currently, the Trump plan is still a proposal in the campaign awaiting the legislative action. Whether the Congress will take over the initiative – and how it will be implemented – does not ignore.
