The odds are looking better for Senate approval of legislation to increase the minimum wage. But reconciling that bill with a House version -- containing no tax breaks for businesses -- figures to take some negotiating.Senate debate on the bill ended Tuesday with an 87-10 vote, and final Senate passage of the bill is expected this week.
The tax package would costs $8.3 billion in lost tax revenue over the next decade -- extending breaks that allow small businesses to deduct up to $112,000 in new investments a year, reducing the depreciation period for improvements to retail properties, extending a tax credit for businesses that hire low-income or disadvantaged workers, and allowing small businesses to use the cash method of accounting.
To help pay for those tax breaks, permanent changes to the tax code would be made. Companies could no longer deduct the cost of jury verdicts or settlements in liability suits against them and executive tax-deferred pay packages would be capped at $1 million a year. Those changes would generate an estimated $1.35 billion over the next decade.
This House passed the same wage increase earlier in January -- by a vote of 315 to 116 -- agreeing to raise the minimum wage from $5.15 to $7.25 an hour over two years. But that bill did not contain any of the tax provisions, which House Democrats have spoken against loudly.
Congressional Democrats have said that their approach to tax relief requires every tax dollar lost to a new tax break to be offset by a tax increase or closed loophole elsewhere.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access