Senator Roger Marshall introduced the Overtime Wages Tax Relief Act, which would exempt up to $10,000 of overtime pay for individuals (and $20,000 for married couples) from federal income taxes. The deduction phases out for incomes above $100,000 (individuals) or $200,000 (married). Sen. Marshall was joined by Senators Tuberville, Ricketts, and Justice—all of whom emphasized the value of hard work and the unfairness of taxing extra hours. He shared his personal story of working long hours on a Kansas farm and in an oil refinery.
“So I was born and raised on a farm. My first job off the farm was at a cell barn outside of El Dorado, Kansas at a sale barn. Every Saturday the farmers would bring in their cattle and we would sell a thousand head, two thousand, three thousand head on a Saturday. A 12 hour day would be a short day there. But the greatest thing I looked forward to was that time and a half after eight hours. But to my surprise, that first time I got my paycheck with that over time, I was shocked to see how much money the government was taking out of my paycheck,” said Sen. Marshall.
The legislation aims to reward hard-working Americans, reduce the burden of inflation, and fulfill a Trump campaign promise of “no tax on overtime.” Supporters argue it would boost the economy and help address workforce shortages. Critics worry about lost tax revenue. Sen. Marshall estimates the cost would be less than $100 billion over ten years and believes the bill could spur growth to help offset that.