During the Trump administration, adjustments to federal tax regulations did not directly target or create a specific tax solely on overtime earnings. However, broader tax reforms implemented at the time, such as the Tax Cuts and Jobs Act of 2017, indirectly affected how individuals and businesses handled income, including overtime compensation. For example, changes to income tax brackets and standard deductions could alter the overall tax liability on earned income, which encompasses any wages received for hours worked beyond the standard work week.
The significance of these broader tax changes lies in their potential impact on take-home pay and business expenses. For employees, a reduction in overall tax burden could mean retaining a larger portion of their overtime earnings. Conversely, changes to business deductions might influence how employers structure compensation packages, potentially affecting overtime policies. Examining the historical context of tax reforms under the Trump administration requires understanding the intended goals of stimulating economic growth and simplifying the tax code, and the subsequent debates regarding their distributional effects across different income levels.
