On Monday, 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.
The KEEP Act will eliminate income taxes rather than payroll taxes to make sure Social Security, Medicare and unemployment funding are unaffected. According to CBO data, individual income taxes accounted for 49 percent of all federal revenue in 2023.
Read the full text of the bill here.
