During this week's episode of Alabama Public Television's "Capitol Journal," House Minority Leader Anthony Daniels (D-Huntsville) pledged to take another shot at enacting legislation to eliminate income tax on overtime pay that would make it permanent.
Earlier this year, lawmakers chose not to extend the 2023 overtime tax exemption, allowing it to expire.
Daniels told host Todd Stacy that he expected it to be a campaign issue, given the Republicans' efforts at the federal level.
"I think that it's going to be a campaign issue, to be honest with you," Daniels explained. "I think that you'll see individuals that are running for state office from the federal level probably talk about that issue because it's been done at the federal level — although there are limits and caps on it. I do think that within the state, I will be introducing another piece of legislation to deal with renewing the limited income tax on overtime pay.
From a fiscal standpoint, I certainly are looking at certain numbers to still prove the naysayers wrong because, although there's a lot of things that are expensive, but what's better things to do to put money, hard-earned money, back in the pockets of those individuals that are earners. Because we are, oftentimes, we're trying to figure out ways to spend some of the money that we have. And I think that right now, there's nothing better than putting the money back in the pockets of the hard-working men and women?"
"They've done at the federal level and I think that states are going to be pressured from the federal level to do something similar within the states again. And so I'm happy that we were the first ones to ever do it, and that they were able to follow our lead at the federal level in doing so. But I hope that we get the courage to go back and put the elimination of income tax on overtime pay back into law and making it permanent."
Daniels noted improvements to Alabama's struggling labor participation rate while the overtime tax exemption was in effect, hoping it would help make the case for a permanent cut.
"So, before agreeing to putting any type of caps on it, I think that it's important that we look at the workforce participation rate. And looking at the workforce participation rate last year, this time, and this year. And since the expiration of the overtime bill, let's look and see and compare apples to apples. Let's compare the income tax receipts. Looking at the income tax receipts. Are people working more? Right?
Or if they're working, if the current workforce is working more, you start to see more revenue generated as a whole. And so I think we got to look at the data to really look and see when we're not doing it, what type of data are we collecting? And are we making certain that the data is accurate and that we're being honest about it? Because what I saw is workforce participation increased during the time of the overtime legislation. I saw individuals taking home more money in their pockets. I saw an increase in the corporate tax receipts.
I saw an increase in individual income tax receipts. And so I just want to see if we're still on that trajectory, June from, you know, next June, or are we not because I think that you got to look at the data and the indirect revenue that it brought in and see does it really, does it make sense?"
Jeff Poor is the editor-in-chief of 1819 News and host of "The Jeff Poor Show," heard Monday-Friday, 9 a.m.-noon on Mobile's FM Talk 106.5. To connect or comment, email [email protected] or follow him on Twitter @jeff_poor.
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