CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Senate Approves Minimum Wage Hike With Tax Cuts

Senate Approves Minimum Wage Hike With Tax Cuts

by Mike Godfrey,, Washington

05 February 2007

Senate Finance Committee Chairman Max Baucus (D-Mont.) has hailed the Senate’s passage of legislation increasing the minimum wage for American workers to $7.25 per hour.

The Minimum Wage Increase Act of 2007 garnered widespread bipartisan support after Baucus and the Senate Finance Committee provided a limited package of tax incentives targeted toward small businesses that employ minimum wage workers. Baucus said that he expects the Senate and House to reach final agreement soon on minimum wage legislation and send it to the White House for signature into law.

“Congress promised American workers a raise, and the Senate delivered today,” announced Baucus. “We worked together in the Senate to get results, and in the process helped both minimum-wage workers and the small businesses that employ them. Now it’s time to take the minimum wage increase the last mile, and harmonize the House and Senate bills to bring American workers a fairer wage. I’m confident that our dedication to a minimum wage increase is stronger than any differences between our two bills.”

The Senate minimum wage legislation includes the language of the House bill, which increases minimum wage workers’ pay from $5.15 per hour to $7.25 per hour over a period of two years. The package of small business tax incentives that helped the wage increase to pass was paid for to make the bill "fiscally responsible," and included:

  • Work Opportunity Tax Credit - A five-year extension of the tax credit provided to employers who hire workers who have experienced barriers to entering the workforce. Also, a modification to the work opportunity tax credit to include a tax credit for employing veterans disabled after the September 11, 2001, attacks.
  • Expensing - A one-year extension of a provision allowing small businesses to immediately deduct as much as $112,000 in capital purchases.
  • Leasehold Improvements - An extension through March 31, 2008, of a provision that allows business owners to more quickly deduct the cost of making improvements to a leased property. Also, modifies the provision to include retailers who make improvements to property they own and business that build new restaurant properties.
  • Cash Method of Accounting - A permanent change to the tax code that will allow more businesses to simplify their bookkeeping by allowing them to use the cash method of accounting for tax purposes.
  • S Corp Reforms - A modification to the standards that allow small businesses to qualify for or remain within the S Corp tax rules.
  • Certified Professional Employer Organizations - Establishes a certificate program for companies that provide and oversee employees for other corporations. The certification would require these companies to meet certain standards set by the IRS. Businesses that contract with certified professional employer organizations would be assured that they would not be liable for those taxes already paid to the certified professional employer organization.

The bill also includes several revenue-raising offsets, a number of which close loopholes, shelters and offshore arrangements such as sale-in lease-out (SILO) shelters on foreign properties, measures against offshore corporate inversions, and a doubling of some fines, penalties and interest on underpayments related to certain offshore financial arrangements.

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »