The Senate Finance Committee has added a provision for $8.3 billion in tax breaks for small businesses to the minimum wage bill. Dems agreed to the breaks because, according to Committee Chair Max Baucus (Mont - D) the incentives were necessary to help the minimum wage increase pass the Senate AND avoid a veto by Bush.
`By acting today, we can help to create a sounder minimum- wage bill. We can help to create a minimum-wage bill that can get more than 60 votes and pass the Senate. And we can help to create a minimum-wage bill that the president will sign.
But the tax cuts were rendered revenue neutral by a dozen revenue raising proposals, including a million dollar cap on deferred executive compensation. Is this good pragmatic action by the Senate or a betrayal of values? more below
The committee voted unanimously to approve the tax measures, including a an extension until 2012 of the Work Opportunity Tax Credit, which benefits companies such as Wal-Mart Stores Inc. and Olive Garden restaurant owner Darden Restaurants Inc. that hire workers on welfare. The legislation offsets the cost of the tax breaks with about a dozen revenue-raising proposals, including a $1 million limit on executive compensation that qualifies for tax-deferred status.
Senate Panel Adds Tax Cuts and Pay rule to Min. Wage
No doubt the House is going to have trouble swallowing anything remotely labeled a business tax cut.
House Majority Leader Steny Hoyer of Maryland said today that inclusion of the tax measures would ``complicate and delay'' passage of final legislation.
``Minimum-wage earners have already waited nine years and four months for a raise,'' he said. ``Congress should not make them wait any longer.''
Should the House stick to its guns and reject the amendment or go along?
The limits on Executive pay are a pretty sweet little piece of legislation too.
The limits on deferred pay, if enacted by the full Senate and the House, may have wide repercussions on the compensation agreements that are common at many U.S. companies, said Robert Willens, a tax accounting analyst at New York-based Lehman Brothers Holdings Inc. ``There isn't a company out there of any size that doesn't have an extensive deferred-compensation arrangement,'' he said.
Public Employee Pension Plan representatives were of course in favor of the restrictions.
The provision would raise taxes on wealthy individuals by a net $810 million over a 10-year period, according to preliminary committee estimates. Individuals would pay taxes they had been deferring and companies would be required to immediately claim compensation deductions.
So where do you stand on this? I left the poll a simple yes or no, give your reasons below.