Treasury Secretary Scott Bessent said Wednesday that President Donald Trump's policy eliminating taxes on overtime pay could help offset potential labor shortages tied to declining illegal immigration, as millions of Americans reported larger tax refunds this year.
Bessent spoke during a Tax Day briefing at the White House, where administration officials highlighted early data showing widespread use of new tax provisions enacted under Trump's 2025 economic package.
"There was this narrative that I think over 2 million illegal aliens have either voluntarily deported or been deported, and that there would be a worker shortage," Bessent said.
"Well, what better way to fill that gap than with overtime for hardworking Americans and for them to keep more of it?"
The policy stems from the One Big Beautiful Bill Act, a sweeping tax and spending law signed by Trump on July 4, that introduced a series of tax breaks aimed at workers and families.
In addition to eliminating federal taxes on certain overtime earnings, the law included provisions removing taxes on tips, reducing taxes on Social Security benefits and allowing deductions for interest on loans used to purchase domestically made vehicles.
Bessent said the changes are already showing measurable effects during the current filing season.
"I will tell you that the biggest one of those that Americans have taken is no tax on overtime," he said. "It's the American way: If you want to work longer hours, you get to keep more of your money."
Bessent noted that Treasury data shows 45% of taxpayers increased their refunds through at least one of the new provisions, contributing to what he described as "record refunds."
Independent reports show average refunds have risen more than 10% compared with last year, with billions of dollars already returned to taxpayers, in part due to new deductions and withholding adjustments tied to the law.
The overtime provision builds on existing federal labor rules under the Fair Labor Standards Act, which generally requires eligible workers to receive time-and-a-half pay for hours worked beyond 40 in a week, though eligibility varies depending on job classification and income thresholds.
Under the new law, certain overtime income can be deducted from federal taxable income, increasing take-home pay and, in many cases, boosting refunds.
Bessent also encouraged workers to adjust their tax withholding to benefit more immediately rather than waiting for annual refunds.
"As [Small Business Administrator] Kelly [Loeffler] and I go out and talk to employers and workers around the country, they all want more overtime," he said.
The administration has framed the policy as part of a broader effort to strengthen the domestic workforce amid stricter immigration enforcement, which officials say has reduced the number of unauthorized workers in the U.S.
At the same time, broader economic pressures remain, including persistent inflation and rising fuel costs linked to geopolitical tensions involving Iran, which have weighed on household budgets.
Despite those challenges, Bessent struck an optimistic tone.
"This is a great day for the American people," he said, adding that the administration's tax policies are delivering tangible financial benefits to workers across the country.
Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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