Senate Democrats rush to finalize new tax provision that will penalize large businesses paying low wages. The move comes after that Elizabeth MacDonough, Member of Parliament for the Senate ruled Thursday night that a $ 15 minimum increase could not be included in the Senate COVID relief package, which is currently being pushed through the chamber through a process known as budget reconciliation.
The plan, drafted by Assistants to Senate Finance Committee Chairman Ron Wyden of Oregon – in close consultation with Senate Budget Chairman Bernie Sanders of Vermont – would impose a 5% tax penalty on ‘very large ‘impose enterprises that do not pay a certain amount to workers. . The amount is still unclear: Wyden favors $ 15 an hour, but is currently seeking feedback from fellow Democrats on the figure and exactly which companies will be fined.
“Everyone in the caucus is targeting ‘very big’ companies – think Walmart, Amazon,” a Senate Democratic assistant told CBS News.
Under the proposal, which Senate Democrats hope to complete by the beginning of next week, smaller businesses that increase their workers’ wages will be eligible for income tax credits equal to 25% of wages – up to $ 10.00 per employer per year – increase tax incentives wages.
“The basic approach for the very large companies at the top is the root, and the small business’s’ root approach is trying to encourage them to raise wages themselves,” the assistant said.
Democratic assistants, who were expecting an unfavorable ruling from the Senate MP, quietly started working on the “Plan B” proposal a few weeks ago. The tax penalties apply not only to large companies that pay low wages to their own employees, but also to those who hire contractors – such as security guards – who earn low wages for work they do on site.
House President Nancy Pelosi stressed on Friday the importance of the minimum wage increase and said at a press conference that “we will not rest until we pass the $ 15 minimum wage.”
The new pressure comes one day after Sanders announced it would introduce an amendment to the COVID relief package to take away ‘tax deductions’ from large, profitable businesses that do not pay workers at least $ 15 an hour and to small businesses that to give incentives. they must raise wages. ‘
The White House acknowledged the new attempt on Friday without endorsing or rejecting it. “We did not review the measure. We certainly did … But we did not review it and we have no final conclusion on the proposal,” White House press secretary Jen Psaki told reporters on board Air. Force One said.
House Ways and Means chairman Richard Neal, whose COVID home lighting bill includes a $ 15 federal minimum wage increase, was also reluctant to consider it. ‘I hesitate, you know, to say something until they decide on a strategy. “I do not want to be considered second guess what they are doing,” Neal said on Friday.
Jason Furman, who served as president of President Obama’s Council of Economic Advisers, issued a warning, tweeting: “This is a very big, complicated, brand new proposal. It’s possible that it works. It’s also * possible “that another tax version works. But I would be very nervous to try out a brand new idea like this, with virtually no investigation.”
Housemates were more enthusiastic about the tax proposal, but warned that it was no substitute for a true minimum wage increase. “I’m very supportive of doing everything we can, but at the end of the day we promised a minimum wage of $ 15, so if the wage of $ 15 min is not in this package, we will find a way. must find out to get it through and if it means reforming the filibuster, we must reform the filibuster, ‘Congresswoman Pramila Jayapal (D-WA) told reporters.
This tax measure, which would be included in the $ 1.9 billion COVID relief bill, would have to have the support of two moderate Democrats – Joe Manchin in West Virginia and Kyrsten Cinema in Arizona – who were opposed to a minimum wage. of $ 15 in the COVID Enlightenment ACT.
Republicans are likely to deviate from any proposal that involves levying new taxes, even if these fines only apply to the largest companies in the country. On Friday, House minority leader Kevin McCarthy called the proposal “stupid,” and Pennsylvania Sen. Pat Toomey called it “redistribution of wealth and social engineering.” This is a bad idea. ‘
Democratic Congresswoman Alexandria Ocasio-Cortez told reporters on Friday that the inclusion of a minimum wage increase had smoothed the “negotiation on this process” for progressives in the House.
“I think Senator Sanders is doing the right thing by trying to include something at the last minute, because the fact is that these negotiations, the whole negotiation of this package for many people, are based on a minimum of $ 15.” Ocasio-Cortez said.
Ocasio-Cortez also challenged Democratic Sen. Joe Manchin of West Virginia, who spoke out against raising the minimum wage to $ 15 and instead proposed raising it to $ 11 an hour.
“His own voters, West Virginians, want a minimum wage of $ 15. So I do not even see what kind of leg he stands on here where the majority of his own state does not agree with him,” Ocasio-Cortez said. . A February poll by the One Fair Wage Coalition, a group that supports a minimum wage increase, found that 63% of West Virginia residents support the minimum wage increase by 2025.
Raising the minimum wage is popular across the country, with a 2019 poll by the Pew Research Center showing that 67% of Americans are raising the minimum wage to $ 15. It even has support in some red states, such as appears from a Florida vote initiative to raise the minimum wage increase to $ 15 by 2026, which passed with the support of more than 60% of voters in the last election.
Some Republicans have taken note of public support for a minimum wage increase. On Friday, Republican Senator Josh Hawley of Missouri announced a proposal that companies with incomes of $ 1 billion or more should pay their employees $ 15 an hour.
According to Hawley’s plan, small business employees earning less than $ 15 an hour qualify for a Blue Collar Bonus in the form of an automatic tax credit. “Mega-corporations can afford to pay their workers $ 15 an hour, and that’s a long time ago,” Hawley said, “but it should not be at the expense of small businesses already struggling to reach it.
Sarah Ewall-Wice reported.