Senate Finance Committee Chairman Ron Wyden, D-Ore., floated a 5% tax on big companies’ payroll costs as a means of enabling a minimum-wage hike to be included in the $1.9 trillion COVID-19 relief bill moving through Congress.
The proposed tax on big companies’ payroll costs would start at 5% as punishment if any of their workers “earn less than a certain amount.”
Wyden, along with Senate Budget Committee Chair Bernie Sanders, both floated corporate-tax measures to be attached to the COVID-19 relief bill as a means of reviving the minimum-wage hike Democrats want to include in the bill. That’s after the Senate parliamentarian, Elizabeth MacDonough, ruled Thursday that the wage increase as proposed didn’t qualify for the fast-track legislative procedure Democrats are using for the aid bill.
“While conversations are continuing, I believe this ‘plan B’ provides us a path to move forward and get this done through the reconciliation process,” Wyden said of his tax-hike idea.
The proposal hits big companies with a “penalty” on their total payroll that starts at 5% and increases over time if any workers earn less than an amount that Wyden didn’t specify in his statement Friday. There would also be “safeguards to prevent companies from trying to outsource labor to avoid paying living wages.”
Wyden didn’t specify the size of companies affected. He said he would provide a benefit to “the smallest of small businesses,” with an income-tax credit equal to 25% of wages, up to $10,000 a year per employer, to those that pay their workers higher wages.
Business groups including the Chamber of Commerce and International Franchise Association criticized moves to boost taxes as part of the aid bill.
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