Overtime Tax Relief, Small Business Gains Drive Trump Tax Cut Success

US Treasury Secretary Scott Bessent told reporters at a news conference that the most widely used provision in the new tax framework was the exemption on overtime income, with more than 25 million filers claiming the benefit.

He said the policy was designed to reward additional work. "If you want to work longer hours, you get to keep more of your money," Bessent said.

The average deduction for overtime stood at about $3,100, according to Treasury data, while millions of workers in service sectors also benefited from the no-tax-on-tips provision.

Officials said early feedback from employers and workers suggested an increase in willingness to take on additional shifts, particularly in sectors facing labour shortages.

Bessent said the administration viewed overtime incentives as a way to address workforce gaps. "What better way to fill that gap than with overtime for hardworking Americans and for them to keep more of it?" he said.

Small Business Administration Administrator Kelly Loeffler said the tax package was also delivering significant gains for small firms, which she described as a "massive economic engine" accounting for the majority of businesses in the country.

She said 12 million small businesses had seen average tax savings of about $7,000, with provisions such as the permanent 20 per cent pass-through deduction helping firms plan for growth.

Loeffler said the tax cuts were enabling expansion and hiring. She pointed to examples of manufacturers increasing shifts and reinvesting savings into new jobs and facilities.

In one case, she said a manufacturing firm in Georgia was ramping up operations after benefiting from the tax measures, while another business used savings to construct new infrastructure.

Officials also cited increased activity in industrial sectors, linking tax provisions such as full expensing of equipment and research incentives to a push for domestic production.

Loeffler said the changes were contributing to what she described as a broader revival of manufacturing and small business confidence, with firms "in growth mode" and planning to hire.

She added that small businesses were benefiting alongside workers, particularly through provisions that reduce tax burdens on wages earned through additional work.

The administration has positioned these measures as central to its economic strategy, focusing on increasing take-home pay and incentivising productivity while supporting domestic industry.

- IANS