Another exciting episode of As the Bill Turns

Posted on | March 29, 2007 | Comments Off

Here’s an update for you on that small business tax package that was attached to the minimum wage increase legislation.

They did that first in the Senate, you may recall, including an $8.3 billion package of tax breaks for small businesses to (unnecessarily, I might add) sweeten the deal of having to give their minimum wage employees a raise.

(I say ‘unnecessarily’ because according to numerous published sources, a lot of small business owners live in states that already have higher minimum wage levels than the federal government’s minimum wage, in addition to the fact that small business owners often operate in highly competitive segments of the labor market and really can’t offer minimum wage jobs if they want good people on their teams.)

The House, highly unhappy because the Senate didn’t pass a ‘clean’ minimum wage bill, caved to the degree that they passed their own small business tax break legislation – still a separate bill from the minimum wage increase – worth $1.3 billion. House Ways and Means Chairman Chairlie Rangel felt that the Senate tax cuts weren’t sufficiently targeted and wanted to pass a package of tax breaks that would be as advantageous to workers as it is to employers.

The Senate, faced with a much more modest package of tax cuts from their House counterparts, has just come back (yesterday) with an amended tax cut package that is even bigger – $3.9 billion bigger, to be exactly – bringing the price tag up to $12.2 billion.

According to Congressional Quarterly, Senate Finance Committee Chairman Max Baucus fees that will strengthen his position when negotiating with the House for a larger package of tax breaks. This way, if they were to, say, split the difference, the final deal will be $5.45 billion instead of the $3.5 billion that the original pair of bills would have produced.

This kind of bicameral bickering was a fairly unusual occurrence when Republicans were running things, largely because of their noteworthy party discipline. However you might feel about that kind of Borg-like party discipline in general, or about Republicans in particular, you have to admit that it allowed them to get quite a lot done.

Except during the 109th Congress, of course.

So, while there are likely to be a bunch of things in this tax cut that will not at all impact most microbusiness owners, there are a lot of other reasons why it will be interesting to see how this one plays out.

[tags]small business, taxes, minimum wage increase, politics[/tags]


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