WASHINGTON, D.C. — Today, U.S. Congressman Russ Fulcher introduced the Keep Every Extra Penny (KEEP) Act to address the ongoing labor shortage by eliminating income taxes on overtime pay.
This legislation, which has never been attempted at the federal level, comes as inflation remains above the Federal Reserve’s target rate for the 38th consecutive month.
“Our nation is facing unprecedented challenges due to workforce shortages and continued high inflation levels. Millions of Americans are looking for financial relief as the rising costs of everyday goods have soared 20 percent since President Biden assumed office. By eliminating income taxes from overtime pay we can help alleviate this burden for hardworking folks by letting them keep more of what they earn while continuing to safeguard government programs such as Medicare and Social Security,” said Congressman Fulcher.
Background:
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The KEEP Act will eliminate income taxes rather than payroll taxes to ensure that Social Security, Medicare, and unemployment funding remain unaffected.
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Individual income taxes accounted for 49% of all federal revenue in 2023 according to CBO data.
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Americans currently eligible for overtime, as defined in the Fair Labor Standards Act under section 7, will be covered under the KEEP Act.
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The Fair Labor Standards Act lead to the establishment of overtime and the 40-hour work week during the Great Depression to provide relief to both the employee and employer. The KEEP Act aims to amplify this relief while our nation faces similar circumstances.
Read the full text of the bill here.