The proposal to eliminate taxes on overtime pay and tips has been estimated to increase the federal revenue by $6.8 trillion over 10 years. This is a significant figure that highlights the potential impact of this policy on the government's fiscal situation1.
The rationale behind this estimate is that currently, both overtime pay and tips are subject to federal income tax. By exempting these income sources from taxation, the government would lose out on potential tax revenue. The estimate assumes that the tax exemptions will not lead to a decrease in overall tax revenue, as the economy grows and other forms of tax increase compensate for the lost revenue from overtime pay and tips1.
However, it's important to note that this estimate is based on current economic conditions and may not hold true in the future. Additionally, the actual impact of this policy on the federal revenue could be different depending on how the tax code is implemented and how the economy responds to the changes.
In conclusion, while the proposal to eliminate taxes on overtime pay and tips is likely to increase the federal revenue in the long run, the exact amount of this increase is uncertain and would depend on various factors.
10/29/2024 10:58pm
