The US Senate passed a minimum wage bill, raising it to $7.25 per hour over a two-year period. The Senate bill contains several other provisions, which will have to be reconciled with the House version of the bill which contains no additional provisions.
Besides increasing the minimum wage from the current $5.15 an hour, the bill would extend for five years a tax credit for businesses that hire the disadvantaged and provide expensing and depreciation advantages to small firms. The tax breaks would be paid for by closing loopholes on offshore tax shelters, by capping deferred compensation payments to corporate executives and by removing the deductibility of punitive damage payments and fines.
Can you imagine that? The tax breaks are going to be paid for! What a novel idea. Guess who’s not happy?
While the tax breaks have won the support of small business groups as well as retailers and restaurant owners, they have drawn opposition from larger businesses that would bear the brunt of the revenue provisions.
All together now – AWWWWWWWW
If one assumes that the differences between the House and Senate versions of this bill will be worked out, it takes the Virginia General Assembly off the hook – or, rather, the Virginia House of Delegates, since the VA Senate already passed a minimum wage increase.
VIVIAN J. PAIGE | All Politics is Local 
Mass job loss in 5, 4,…
when we get to 0, and it doesn’t happen, will you come back and say you were wrong?
Zero is a long ways away MB. Let’s give this a set frame of time, say a year after it becomes law (that is, if President Bush signs it, which is not certain, or if Congress is able to override a veto). If you are right, I welcome you to come back and show me that unemployment rates are holding steady. If not, I won’t come looking for you; knowing that you are wrong will be enough for me.
But I do want to know one thing. What is going to stop these companies from laying off their lowest paid workers if they see no reason to pay a worker $7.25/hour for what work they believe is of less value than that?
CR – I hope you mean three years, because the increase is phased in over two years.
Two points.
1. If the minimum wage is such a grand idea, then why not raise it to $200/hour. As it is, the people who suffer from this assinine nonsense are the very people the minimum is suppose to help.
The minimum wage is ignorant economics. People get paid based upon supply and demand. The reason low skilled workers earn low wages is because there plenty of people without any skills. The fact we have illegal aliens in this country just adds to the supply.
If we raise the minimum wage, two things will happen. People will be fired because the work they do cannot pay for itself, and employers will find it cost effective to automate and lay off additional unskilled workers.
2. Why do we have to pay for tax breaks? Whose money is it? Do you ever give any thought over the moral implications of taxation?
I guess I could be mistaken. I suppose some people want other people to pay taxes so that we can smugly witness their pain. However, I think the idea is that WE all are suppose to pay taxes for the services we receive from our government.
We don’t need taxes to punish people. We need taxes provide our government the resources our government needs to protect our rights. If taxes diminish people’s rights more than it protects them, taxes are wrong. As it is, our government is getting so much of our wealth, the growing power of government places all our rights in jeopardy.
Wow, talk about ignorant economics. First, you presume a perfect market with respect to labor. Second, if you don’t like the phrase “paying for tax breaks”, perhaps you’d prefer “ensuring against free riders”?
Ever consider the moral implications of no-tax-is-good-tax whiners like you who expect to reap the benefits of an organized and civil society – the product of public education, a working legal system, and transportation infrastructure – without ever paying a dime in taxes? No, it doesn’t seem so.
Tax cuts = service cuts
Unless that is the idea to begin with, then the people who think that there should be no tax increases or more tax cuts. I ask those people, what services do you want to cut instead?
Oops
I mangled that pretty bad. Hope everyone understood what I was saying.
MB – Presumptions — yes that is a good place to start.
When I call the minimum wage ignorant economics, that is because that is what it is. Perhaps I am guilty of putting it too harshly, but the statement itself is nevertheless true. Only someone ignorant of economics would think to pass such a law. What it presumes is that low wage workers are not being given a market wage (that is, they are being underpaid). What it also presumes is that employers will accept their losses and pay unskilled employees the higher wage.
Some people also presume honor does not matter, that it is okay for Congress to pass a minimum wage law, but the minimum wage law is unconstitutional. Unfortunately, some people have found it convenient for the Constitution to mean whatever the Supreme Court says it means instead of what it actually says.
You also presume to say of me: “no-tax-is-good-tax whiners like you who expect to reap the benefits of an organized and civil society,” yet you do not know me. All it takes, apparently, is the fact I presume to disagree with you for you to categorize me as whatever kind fiend you choose to label me.
On the other hand, I do not think I have to presume anything about you. You have demonstrated significant intolerance. Tolerance is more than accepting people that look different. Tolerance requires that we accept the right of others to believe different things.
Mark Books – if we had low taxes, your observation that tax cuts equate to service cuts would be true. With the high tax rates we currently have, I do not know. Because high taxes can stifle economic activity, revenues can increase with tax cuts. Unfortunately, because the increase in revenues lags behind tax cuts, that relationship is hard to prove.
In any event, that was not the point I addressed. What I have problem with is the attitude we have to “pay for tax cuts.” It is the other way around. I believe our leaders have the obligation to justify the taxes they want to take from our fellow citizens in our name.
My reason for wanting to pay for tax cuts is that I’d rather the deficit not get any larger. It becomes a pay now or pay later situation. Six years of tax cuts and spend have increased the deficit to the point where y’alls grandchildren are going to be paying for it. It is fiscally irresponsible to cut taxes and borrow money to pay for the cuts.
When we tax people, we do not give tax payers much choice in the matter. Ultimately, it is either pay up or go to jail. Given that, I think it is far more important to worry about the justification for the taxes than it is to balance the budget.
When so much of the budget is about robbing Paul to pay Peter, I think we have a far greater irresponsibility to worry about than not balancing the budget. When we have such things as the older generation expecting their grandchildren to pay outlandish social security and medicare bills, fiscal responsibility begins to reek of hypocrisy.
Note that I am just as old as you are, and I have children too.
But fiscal responsibility has to start somewhere, so it might as well be now. (I don’t have kids – that’s why I said y’alls grandchildren.)
As I said – six years of tax cuts and spend has proven to not be the answer. And you can’t get any more fiscally irresponsible than that.
Changing the subject?
A balanced budget is spending equal to revenues. When we balance our budget with paper money with nothing behind it (no gold standard), a small deficit is a small matter. The main issues are inflation and the affect on interest rates. Both are currently quite low.
What is irresponsible is for our government to assume functions for which it offers insufficient moral justification. When we force our fellow citizens to adopt our causes whether they like it or not, that is immoral. When we try to use government to force utopian ideals on others, we miss a fundamental moral issue. So long as they do not trespass on the rights of others, our fellow citizens have the right to disagree and live as they wish.
We have government and taxes to ensure everyone has the right to be left in peace; we do not have government to implement social welfare programs. We cannot morally justify taxes just to empty one person’s pocket and fill another’s.
When you force someone to pay charity, at best (in the case of social security or medicare) you are forcing them into a business arrangement they do not want. Do you really think someone ought go to jail for not wanting to participate your favorite charities?