04/ 02/ 2007
NFIB supports small-business incentives included in Senate bill and continues to work with lawmakers to ensure similar measures are included in compromise bill
Earlier this year, the U.S. Senate approved by a vote of 94 - 3 legislation that increases the federal minimum wage from $5.15 to $7.25 an hour. The bill included an $8 billion tax-relief package for small businesses that face the greatest difficulties in meeting a federally mandated wage hike. Clearly, senators recognized NFIB's argument that they can't help American workers if they harm the businesses that employ them.
The addition of the more than $8 billion tax-relief package was a success for NFIB and small-business owners in an otherwise difficult political fight. NFIB lobbyists pushed to ensure these tax cuts were included, working with Senate Finance Committee Chairman Max Baucus (Mont.) and Ranking Member Charles Grassley (Iowa) to help limit the burden a minimum-wage hike will place on small businesses.
How the Senate bill helps small business -- NFIB was responsible for the inclusion of the expensing, depreciation and cash accounting proposals. Each of these proposals provides significant relief to the small-business community, which would be disproportionately hit by the wage hike. These proposals allow businesses to keep more of their hard-earned money to invest in the growth of their businesses and to create more jobs, thereby further strengthening the economy.
Small business doesn't fare as well in House version Ð The Senate vote was an important victory, but one which left several more steps that must take place before a final compromise can be reached. In early January, the U.S. House of Representatives passed a version of the bill that didn't contain any small-business tax relief. The House's majority leadership, including tax-writing Ways and Means Committee Chairman Charlie Rangel (N.Y.), reacted to the Senate's vote by insisting on a stand-alone wage hike. However, by mid-February, Chairman Rangel and U.S Rep. Jim McCrery (La.), the Ways and Means Committee's ranking member, agreed to add a considerably more modest small-business tax package (though it does contain a more generous Section 179 proposal), which passed the committee by a unanimous voice vote. The full House passed the smaller package, valued at $1.8 billion, on a vote of 360 - 45.
The House's reluctant turnabout was welcome news for small business, but the Senate bill is clearly preferable. Moving forward, the House and Senate leadership must work to reconcile their tax packages in order to pass the bill. NFIB will continue to work to ensure that the final version of the minimum-wage legislation includes the important small-business tax relief contained in the Senate's legislation.
NFIB.com
NFIB continues to follow this important bill. To get the latest news on the progress of the minimum-wage hike bill, visit the minimum-wage issue page on NFIB.com.
