•     "While key details are missing from the overtime proposal, exempting overtime pay from income tax would significantly distort labor market decisions. Employees would be encouraged to take more overtime work, and hourly or salaried non-exempt jobs may become more attractive if the benefit is not extended to salaried employees who are exempt from Fair Labor Standards Act (FLSA) overtime rules. Trump’s proposal would also affect employers as employees find ways to request more overtime work, raising employer labor costs. For some employers, the increased attractiveness of overtime work may fit well with their existing operations. For other employers, they may need to be more aggressive to contain overtime requests as total labor costs rise." Source: Tax Foundation

•     "The proposal will likely be abused. Some (people) get overtime at double or even triple time so there will be an incentive for employers, including business owners, to classify their income as overtime." Source: Certified public accountant Richard Pon 

•     "A key principle of tax policy is that taxpayers with equal incomes should pay similar amounts in taxes. It is useful to evaluate new tax proposals through a horizontal equity lens—that is, to consider whether the new proposal would create greater divergence in how similarly situated tax filers would be treated under the code. Exempting overtime pay from taxes would exacerbate horizontal inequity, arbitrarily favoring certain workers over others. Consider two examples based on potential wages and likely overtime eligibility for a few occupations: Consider a hotel clerk who makes $16/hr and works 45 hours a week, earning about $760/wk (~$39,500 annually) with their overtime pay. Compare this worker to a clerk at a car rental business who earns $19/hr and works 40 hours a week, making roughly $760/wk (~$39,500 annually). Under a tax preference for overtime, the hotel clerk would have a lower tax burden than the car rental clerk despite them both workers earning the same amount each year. Similarly,  consider a front-line supervisor at a retail store who works 50 hours a week earning about $1,250/wk (~$65,000 annually). Because this worker falls within the “white collar” exemption and is not eligible for overtime pay under the FLSA, they would not benefit from the “no tax on overtime” proposal. Meanwhile, a medical records technician who falls outside of the “white collar” exemption earns just under $23/hr and typically works 50 hours a week. With her overtime pay, she is also earning about $1,250/wk (~$65,000 annually). Under a “no tax on overtime” policy, while these two workers earn the same amount each year, the medical records technician wouldn’t have to pay taxes on more than $17,700 of their earnings while the retail worker would continue paying taxes on their full salary of $65,000." Source: The Yale Budget Lab