Increasing the minimum wage has been a hot topic in Congress. The House recently authorized a bare-bones bill that simply increases the minimum wage over a period of time. The Senate then took up that legislation.

On analysis, GOP members of the Senate Finance Committee pushed hard for a bill that would lessen the financial impact on small businesses (those that generally pay minimum wages to employees) by granting various tax cuts geared to these small businesses. On these tax cuts, tax accountant David Sands of Buchbinder Tunick & Cos. states that they are a significant benefit for small businesses, and that he would “certainly like to see this passed with or without the minimum wage.”

CNN Money Article
Democrats on the Senate Finance Committee insisted on a “pay as you go” plan. That meant any tax cuts given to small business must be offset by increased tax revenue. The compromise was the inclusion of various tax measures, including “clos[ing] tax loopholes and curb[ing] corporate tax shelters that have passed the Senate in recent years,” only to later die in the House.

Beacon News Article
And so with these two provisions, the Senate Finance Committee voted “unanimously in favor of a minimum wage bill that would have lowered taxes for small business, while closing corporate tax loopholes (effectively raising taxes on large corporations).” The bill was sent to the floor for a vote by the entire Senate. But Democrat leaders refused to submit the Senate Finance Committee bill, instead insisting on a minimum wage bill that excludes any tax cuts or tax reform via closing of corporate loopholes.

Reportedly, Senate Democrats desire to “blame the Republicans for any impasse,” while ignoring that the compromise legislation would have easily passed.

Mercury News Article

Paul H. Masters is a former CPA with Grant Thornton, having worked as an associate tax attorney for Baker & McKenzie and Vinson & Elkins, currently serving as an assistant attorney general. These opinons are those solely of the author, and to not represent those of his past or current employers.

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