The concept implies the elimination of taxation on earnings derived from work exceeding standard working hours. As an illustration, if an individual’s regular hourly wage is supplemented by additional compensation for hours worked beyond a standard 40-hour workweek, this additional compensation would not be subject to federal, state, or local income taxes.
Such a policy potentially incentivizes increased productivity and provides a larger disposable income for individuals working extended hours. Historically, arguments for this type of measure often center on stimulating economic growth by encouraging a greater workforce participation and rewarding those who contribute additional labor. Furthermore, proponents suggest that it could alleviate financial burdens on working families.
