January 5, 2006

Linking Tax-Reform and the Minimum Wage?

Carroll Andrew Morse

According to Scott Mayerowitz in the Projo, the first major issue to be taken up in this year's Rhode Island legislature appears to be raising the minimum wage...

House leaders yesterday introduced and planned to "fast track" legislation that would raise Rhode Island's minimum wage to $7.10 an hour as of March 1.

The bill by Rep. Charlene M. Lima, D-Cranston, is almost identical to legislation passed last year by the General Assembly but vetoed by Governor Carcieri.

Raising the minimum wage is, in fact, an item that Speaker of the House William Murphy said was amongst the three most important priorities in the current legislative session...
Let it be our New Years resolution; let it be our sense of duty to every Rhode Islander struggling to make ends meet that puts Responsible Tax Reform, A Comprehensive Energy Strategy, and A Fair Minimum Wage and to protect identities of individuals and other things that come to the floor front. Lets resolve to make those some of our legislative priorities this year (emphasis in original).
There is both a political logic and an economic logic to linking minimum wage and tax reforms. In theory, the right set of tax cuts could help offset the money that employers would have to pay out in increased wages. State Senator Daniel DaPonte sees the connection...
Sen. Daniel DaPonte, D-East Providence, plans to introduce legislation in the Senate increasing the wage....

DaPonte said that while a raise in the wage in necessary there also needs to be "relief on the other side for employers." He said that relief needs to come in changes to the state's tax laws.

Before approving a minimum wage increase, legislators who believe there is a connection between tax-reform and the minimum wage should present the details of a tax-reform package to the public, so we can see that more than just cosmetic changes to the tax code are under consideration. The tedency of the government is always going to be to spend other people's money, while not (directly) touching its own revenue streams.

And, after all, this is Rhode Island. In the mind of the Speaker, "Tax Reform" could mean something like reducing the taxes paid by hypothetical casinos in West Warwick.

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I've been around a long time and let me just tell you what is about to happen. The governor has taken his base for granted. He shows in the paper today that there is no philosophy to his administration. Raising the minimum wage will HURT the economy of RI. Acorn nailed him on three things and now this disaster.
Negotiating with the evil doing backstabbers at the state house will only lead to disaster.
He's been the governor for three years and now the state has a 70 milllion deficit heading to 200 million in the red. This is a disaster! Small businessmen are turning away from him! How would you feel if you were running a coffee shop and now with the restaurant tax and now this tax, who you voting for.

Been around a long time this is the tipping point.

Posted by: Ivan the elder at January 7, 2006 12:02 PM

Ivan, this sort of thing happens time and again. We elect a guy that sounds like a reformer, sounds like a fighter and he ends up compromising and caving in to the majority party and the special interests.

If Carcieri doesn't have the fight in him, he shouldn't be seeking a second term.

Thankfully, when Steve Laffey is elected to the U.S. Senate, he will become the undisputed leader of the Rhode Island Republican Party and more importantly the voice for all people who seek reform. Then, finally we'll have the leadership we need to start defeating the special interests and willing seats in the legislature.

The Governor, Linc Chafee and the State GOP leadership are champions of the status quo and just don't know how to get things done. They should just let go and let Laffey!

P.S. Yes! I'm watching the game. 7-0 GO PATS! GO LAFFEY!

Posted by: warbucks at January 7, 2006 9:15 PM

He opposed this move last year.

I'm not sure but, MASS was discussing a hike to 7.45/hr and connecticut was already at 7+/hr. If the MASS change went through, RI has the lowest wage in the tri-state area.

I don't see that raising wages would place RI at any further economical disadvantage than it already is for other reasons.

Posted by: don roach at January 9, 2006 1:23 PM



Posted by: IRS at March 31, 2006 9:25 PM