One of the most notable features of President Donald Trump’s “big beautiful bill” passed by the House early Thursday is a series of tax cuts exempting tips, overtime and Social Security from taxes. The White House said no taxes on overtime and tips “makes good on two of President Trump’s cornerstone campaign promises and benefits hardworking Americans where they need it the most — their paychecks.”
The so-called populist tax measures have garnered headlines and won praise from Republican lawmakers, as well as unions representing police and firefighters. And lawmakers in 19 states from Massachusetts to Mississippi have proposed their own “no tax on overtime” bills this year, according to the Economic Policy Institute.
What has received far less attention, aside from a legal blog or two, is that the Trump administration just made it more difficult for millions of American workers to earn overtime — and benefit from the tax measure.
The U.S. Department of Labor has quietly paused its appeals of a ruling by a Texas judge that reversed the Biden administration’s changes to the overtime rule — which expanded the right to overtime pay for 4.3 million salaried American workers. The rule had increased the salary threshold for overtime exemption from $35,568 to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025.
A spokesperson for the Department of...
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