House Ways and Means Committee Chairman Charles B. Rangel has announced that the Committee will hold a hearing next week on the revenue increasing measures that are included in the Senate-passed version of the Small Business and Work Opportunity Act of 2007.
Both the House and Senate versions of the Act would increase the Federal minimum wage for the first time in ten years. The Senate-passed version coupled an increase in the Federal minimum wage with a package of tax benefits costing $8.3 billion over ten years.
In order to offset the cost of these tax benefits, the Senate bill includes over a dozen separate provisions that, in the aggregate, would raise $8.3 billion over ten years. These offsetting revenue increases would, among other things, change the tax treatment of certain leases entered into before March 12, 2004, deny deductions for certain government-required payments and punitive damages in civil actions, enact new limitations on deferred compensation plans, and change the tax treatment of certain financial instruments. The Committee on Ways and Means has not held prior hearings on these issues.
By contrast, the House has approved a much smaller package of tax relief to accompany the minimum wage increase, worth about $1.3 billion, and these two bills must be reconciled before being passed into law.
“The Senate tax relief package includes a number of revenue-raising provisions that would have a significant impact on the business community," stated Rangel in announcing the hearing, scheduled for March 14.
"Since the Senate-passed bill was intended to help offset the costs associated with an increase in the Federal minimum wage, it seems only fair that the business community should be given an opportunity to explain the effect these revenue increases would have on businesses," he added.
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