October 7, 1999
> Minimum Wage Hike Proposed
> Filed at 3:56 p.m. EDT
> By The Associated Press
>
> WASHINGTON (AP) -- The minimum wage would rise $1 over three years and
businesses would get $35 billion in tax cuts under bipartisan legislation
circulating Thursday in the House. . . . Republicans and Democrats
acknowledge that an increase in the $5.15-an-hour wage is all but
inevitable, but many are looking for a way to offset the estimated $16
billion cost to businesses. >
One should take care to verify that these numbers are as comparable as they are being made out to be. I very much doubt the tax breaks amount to $35 billion a year, but I will need to investigate. These numbers are usually stated in terms of five or ten year totals.
It might be noted that the tax breaks could easily have nothing to do with small business. As Iris Lav notes in a Center for Budget & Policy Priorities article (cbpp.org), some of the proposals like eliminating the estate and gift tax are peripheral at best to the costs of the minimum wage.
It is equally true, of course, that an EITC increase is no less likely to be paired with other tax cuts, so that's not a particularly good criterion for comparison.
mbs