Democrats drop plan to tax corporations that don’t pay $15 minimum wage

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Democrats introduce bill to raise minimum wage to $15 by 2025.The Raise the Wage Act of 2021 was introduced earlier this month.If passed, it would gradually increase the federal minimum wage over five years to reach $15.The Raise the Wage Act is a critical step toward lifting hardworking people out of poverty, .., House Labor Chair Robert Scott, via statement.... addressing income inequality, and building back a better economy where everyone can succeed, House Labor Chair Robert Scott, via statement.The bill also proposes "phasing out subminimum wages for tipped workers, youth workers and workers with disabilities ...".... and making sure the value of minimum wage doesn't decrease over time by tying it to inflation.According to the Economic Policy Institute, 32 million Americans would see their wages increased by the Act.In the richest country in the history of the world, if you work 40 hours a week, you should not be living in poverty. , Incoming Senate Budget Chair Bernie Sanders, via statement.Minimum wage must be a living wage, enabling people to live with dignity, Incoming Senate Budget Chair Bernie Sanders, via statement.The federal minimum wage has not been increased in over 10 years

Senate Democrats have jettisoned an alternative minimum wage plan that called for tax penalties on large corporations that fail to pay at least $15 an hour, according to reports.

Put forth last week by Senate Finance Chair Ron Wyden, D-Oregon, and Senate Budget Chair Bernie Sanders, I-Vermont, the plan would have created an indirect path to raise the pay of some workers after parliamentary rules in the Senate necessitated the issue be scratched from the $1.9 trillion coronavirus stimulus bill that passed the House over the weekend.

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Deliberations for the corporate tax — which was viewed as potentially more palatable to the Senate parliamentarian — broke down due to numerous practical and political challenges that arose as the proposal was being drafted, according to The Washington Post.

Economic experts said the tax penalty would have been problematic to implement, and that corporations would’ve been able to easily sidestep the requirement by recategorizing employees as contractors.

“I would be extremely nervous about trying out a brand new idea like this with virtually no vetting,” Jason Furman, a former Obama administration economist, said on Twitter on Friday.

Wyden and Sanders faced a short time window to nail down the proposal, and it was uncertain whether every Democrat in the Senate would have supported the measure. The White House was also mum on the idea and has indicated that President Joe Biden was not inclined to overturn the parliamentarian’s ruling.

Democratic leaders want to have Biden sign the stimulus into law before unemployment benefits expire for millions of people in mid-March, meaning there is little time for an alternative plan to emerge, the Post reported.

It remains to be seen how the Senate will ultimately strike the minimum wage issue from the House stimulus bill. Other measures to raise the pay of minimum wage workers still have potential to be included, the Post reported.

Despite the early hurdles, Democrats have vowed to keep pursuing minimum wage legislation later in Biden’s presidency.

“We’re going to have to spend the next several days or even weeks figuring out the what best path forward is, but he’s committed to doing that,” White House press secretary Jen Psaki said Sunday on Fox News.

The federal minimum wage has remained the same since it was last increased to $7.25 an hour in 2009.

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