Democrats Weigh ‘Plan B’ to Raise Minimum Wage – By Lisa Hagen (US News) / Feb 26 2021
After a setback, Senate Democrats are weighing a proposal that imposes tax penalties on large corporations that don’t raise wages, while giving incentives to small businesses to do so.
DEMOCRATS ARE EXPLORING new alternatives that could provide workers with a minimum wage increase through indirect channels after a key Senate official ruled that the provision cannot be included in the party’s sweeping coronavirus relief bill.
The search for a backup proposal comes a day after Senate Parliamentarian Elizabeth MacDonough ruled Thursday that the $15 minimum wage provision runs afoul of budget rules. Because Democrats are aiming to fast-track the COVID-19 bill through budget reconciliation – a process that allows them to pass bills on a simple majority without needing GOP support in the 50-50 Senate – provisions included must meet certain thresholds established by the so-called Byrd rule.
On Friday, Senate Finance Committee Chairman Ron Wyden of Oregon and Senate Budget Committee Chairman Bernie Sanders of Vermont proposed levying tax penalties against large corporations who don’t raise wages for workers, while also incentivizing small businesses to do so.
Wyden said his plan would “impose a 5% penalty on a big corporation’s total payroll if any workers earn less than a certain amount,” adding that the penalty would increase over time. In addition to the penalty, the proposal would give income tax credits “equal to 25 percent of wages, up to $10,000 per year per employer” to small businesses that increase wages.
