Fixing a Non-Problem

Small businesses don't need new tax cuts to offset a minimum wage hike.

By Robert B. Reich
Web Exclusive: 01.10.07

One of the first items of business for the new Congress is increasing the minimum wage from $5.15 to $7.25. The president says he'll sign the bill, but only if it contains new tax breaks for small businesses that will offset the increased cost resulting from a minimum-wage hike.

Congress should pass the minimum wage increase without any small-business tax break. Small businesses don't need new tax breaks -- because the minimum wage increase won't actually impose new burdens on them.