House tax writers will consider more than $1.5 billion in small business tax cuts next week in hopes of freeing minimum wage legislation currently stuck in an impasse between the House and Senate. The tax package is less than one-fourth the size of what the Senate passed last week, but it sets the stage for negotiations that could result in the first increase in the minimum wage in a decade. The legislation would raise the wage floor by $2.10 over two years to $7.25 an hour. The House proposal has the bipartisan backing of Ways and Means Committee Chairman Charles Rangel, D-N.Y., and the panel's ranking Republican, Rep. Jim McCrery of Louisiana. The committee is expected to consider the proposal Monday. The legislation would then go to the House floor later in the week.
The tax breaks would be paid for by eliminating a tax loophole that permits wealthy taxpayers to shift income to their children in order to avoid high capital gains and dividend tax rates. In drafting the latest language in the legislation, House Democrats made an abrupt shift from their public insistence just days ago that they wanted Congress to pass minimum wage legislation without any tax relief in it.