minimum wage act is really all about the taxes state and federal
governments would take in on the backs of the minimum wage workers
and their employers.
are reported to the Bureau of Labor Statistics as making the minimum
wage. There are an additional 300,000 workers reported as earning
exactly $5.00 an hour. If these workers were included along with
those earning the current $5.15 minimum plus restaurant and drinking
establishment and service industry workers the total estimated workers
directly affected by the new minimum wage rules would be 1.9 million.
There are an additional estimated 3.7 million workers who make above
$5.15 and less than the $7.25.
Let's do the
math on the 479,000 reported minimum wage workers using as a basis
a single worker with no dependents other than themselves living
days after the new minimum wage legislation is enacted hourly wages
will be increased $.70 to $5.85 an hour or $234 gross pay a week
netting $202.59 after income and payroll taxes. Increased net weekly
income is $22.55 over the previous $5.15.
of increased income and payroll taxes gets the government $15 million
a week or $780 million a year in new tax income from minimum wage
has total payroll expenses of $258.63 with Social Security — Medicare
— Unemployment Taxes. The $24.63 in increased employer taxes generates
some $615 million of new tax revenue paid to government coffers.
of new increased tax revenue from minimum wage workers and employers
is paid in taxes to the government from the first $.70 minimum wage
The 2nd year
minimum wage increase is $6.55. A worker receives $262.00 netting
$224.84 after income and payroll taxes. Increased net weekly income
is $44.50 more over the $5.15 minimum wage.
increase in taxes gets the government $17.8 million a week or $925
million in taxes paid by minimum wage workers.
has payroll expenses of $288.77. The $26.77 in increased employer
taxes generates $666 million of revenue paid to the government by
is paid to the government from minimum wage workers and employers
in the 2nd year.
The 3rd Year
minimum wage increase is $7.25. A worker would get gross pay of
$290.00 netting $245.77 after income and payroll taxes. Increased
net weekly income is $65.73 more over the $5.15 minimum wage.
in increased weekly income and payroll taxes generates $21 million
to the government coffers from minimum wage workers or $1.1 billion
has payroll expenses of $318.92 and this $28.92 in increased employer
taxes will generate some $720 million of revenue paid to the government
is paid in taxes to the government from minimum wage workers and
employers in the 3rd year.
Thus $4.8 billion
is paid by the 479,000 minimum wage workers and their employers
to the government in extra income and payroll taxes in first three
If these figures
were applied to the 1.9 million minimum wage workers and their employers
this would generate four times the $4.8 billion government revenue
or $20 billion in extra government income.
If these figures
were applied to the 3.7 million minimum wage workers and their employers
this would generate 8 times the $4.8 billion government revenue
or $38 billion in increased government revenues.
If the figures
were applied to the number of minimum wage workers Speaker Pelosi
is claiming of 7.5 million this would be almost 16 times the $4.8
billion or $75 billion in additional government revenue.
In pure general
terms during the first three years the Speaker Pelosi pogrom against
minimum wage workers takes an average of $6,000 out of their pockets
with her be-knighted plan to help low-wage workers. Each employer
has $4,000 taken out of their pockets for each minimum wage worker
during the same period.
Pelosi desires to help minimum wage workers do these things. Repeal
the federal minimum wage law. Repeal income and payroll taxes for
everyone earning below the federal poverty guidelines. Absolve all
employers from providing matching payroll taxes for Social Security
and Medicare for all workers earning below the federal poverty guidelines.
This also increases the capital available to small business owners
for new hiring and capital expansion.
Then by federal
mandate, which is an extremely sad but unfortunate necessity to
prevent states from adjusting their income taxes upward, require
all states to repeal their income taxes for poverty level workers
and their minimum wage laws. Further, require all states with a
sales tax to put a floor of at least $100.00 on purchases as sales
taxes is extremely regressive to low-wage workers.
I am certain
we can count on Speaker Pelosi's compliance in these matters since
she is so concerned about the welfare of low-wage workers and their
Getty [send him mail]
is the senior staff member of a tax attorney with his practice located
in San Francisco. He is a Chu Lai I Corp Vietnam Veteran. A recipient
of the Lights of Liberty award for dozens of Letters-to-the Editor
published under his name as Chair of the Initiatives Committee —
Libertarian Party of San Francisco in various Bay Area newspapers.
Several of his op-eds espousing the Libertarian message have been
published in various mainstream media in California.