"The people who work overtime are among the hardest working citizens in our country and for too long, no one in Washington has been looking out for them.”
A central pillar of President Donald Trump’s America First agenda is to put American workers first.
Main Street over Wall Street. Bread-winning American jobs over cheap foreign labor. Real wage growth, upward mobility, and economic security for working Americans rather than the failed mantras of “learn to code” or “let them eat flat screens.”
No doubt, Trump’s strategic vision to put American workers first will require many tough tactical policy decisions to see his plans through – stemming the tide of illegal immigration, slashing the cost of American energy, cutting the fat out of the federal bureaucracy, and resetting the balance (or imbalance) of global trade – to name a few.
Of course, the reaction to Trump’s tough tactics differs daily. DOGE’s assault on the federal bureaucracy initially stole the spotlight. Now Trump's reset of global trade is garnering the most attention as tariffs rise and stock markets around the globe fall. Who knows what the next shiny object will be? Greenland perhaps?
Yet, as the chattering classes continue to yap their days away, the Trump administration continues advancing more policy actions that they believe will directly help American workers – i.e. permanent tax cuts, including tax-deductible interest payments on American-made cars, no taxes on Social Security, no taxes on tips, and no taxes on overtime.
As to the latter, Trump was correct to say on the campaign trail that overtime workers are “among the hardest working citizens in our country” and that “no one in Washington has been looking out for them.”
With the attempts to rebalance global trade and restructure the federal bureaucracy underway, American workers will need all the “looking out” they can get to shelter from this impending storm of change. Hopefully, Congress will soon follow Trump’s lead in looking out for American workers, as will many state governments across the nation.
Alabama is already ahead of the curve on this particular America First policy. When the Alabama Legislature removed taxes on overtime pay in 2023 with overwhelming bipartisan support, Alabama was first in the nation to put overtime workers first. Since Jan. 1, 2024, the overtime pay of hourly workers in Alabama hasn’t been taxed by the state.
The bad news is that Alabama’s first-mover status is about to be worth less than zero.
After letting hourly workers keep their overtime wages for 17 months, the state government is now planning to slap the tax back on those hard-earned wages, allowing the overtime tax exemption to sunset.
But it doesn’t have to be this way.
A bipartisan piece of legislation (HB467) was filed by House Minority Leader Anthony Daniels (D-Huntsville) and co-sponsored by House Majority Leader Scott Stadthagen (R-Hartselle) to make the overtime tax cut permanent. Yet, Alabama Speaker of the House Nathaniel Ledbetter (R-Rainsville) is pouring cold water all over any chance of the bill’s elevation, feigning sticker shock while calling himself a “fiscal conservative” in his opposition to making the cut permanent.
Apparently, Ledbetter foolishly thought – if you can even call it thinking – that he could put Alabama workers first, but only as a kind of beta test on the cheap.
Yes, Alabama cut taxes in the last quadrennium, but not nearly as much as spending increased and revenues grew in both the General Fund and Education Trust Fund over the last decade.
Though the true cost of the overtime tax exemption is debatable, I suspect Alabama could afford the cost of overtime workers keeping $200-$300 million of their wages in their own pockets – especially when factoring in the dynamic economic incentives such a tax exemption gives to work and invest more in the state. Given Alabama’s low workforce participation rate, as well as the need to compete with the growing list of neighboring zero-income-tax states, a permanent overtime tax exemption makes common sense without breaking the bank.
One would think that in a state where Trump won 62% of the vote, Ledbetter would be proud to follow Trump’s lead by continuing to put American workers in Alabama first. Just continue the bipartisan policy, Mr. Speaker! Or at least don't stand in its way!
Again, that’s what makes this worse, that Alabama was first. Overtime workers in Alabama have seen their take-home pay increase significantly for the last year-and-a-half to the tune of hundreds, if not thousands of dollars on an individual basis. But now, right as the storm of change thunders on the horizon, and right as Alabama is actually ahead of the curve on a good idea, Ledbetter wants the government’s cut of workers’ wages back.
Sad!
Indeed, here in Alabama, it seems the Montgomery crowd with their Yellow-Dogs and Big Mules always comes first, while the working class is always put last.
Joey Clark is a native Alabamian and is currently the host of the radio program News and Views on News Talk 93.1 FM WACV out of Montgomery, AL M-F 12 p.m. - 3 p.m. His column appears every Tuesday in 1819 News. To contact Joey for media or speaking appearances as well as any feedback, please email [email protected]. Follow him on X @TheJoeyClark or watch the radio show livestream.
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to [email protected].
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