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ther. No one group should be singled out to carry For example, in his fiscal year 2015 budget, President
the whole burden. Obama proposed major reforms to the EITC. More
recently, Isabelle Sawhill and Christopher Pulliam
Yet this is precisely the effect of a minimum wage, of Brookings provided a fine overview of the issues.
raised or otherwise. It is a transfer of income to a select The Tax Policy Center has advanced some useful
few, paid for at least initially by the businesses, most ideas. Jason Fichtner of George Mason University’s
typically the small businesses, who hire them. This Mercatus Center and Indavar Dutta-Gupta of the
leads to the obvious question: What sin have these Georgetown Center on Poverty and Inequality have
businesses committed in hiring low-wage workers that proposed other EITC reforms advertised as explicitly
they should be punished this way, paying the total cost “bi-partisan.”
of a social policy?
Tax reform addressing issues raised by the
The costs of a social policy should be systematically minimum wage debate would be expensive, no
socialized, not heaped upon an unfortunate few. doubt, which raises the issue of spreading the costs
Fortunately, we already have mechanisms in place to widely. The magnitude of the expense underscores
achieve the policy goal associated with a minimum the wrong inflicted by asking a relatively small
wage: Reforming the Earned Income Tax Credit (EITC) portion of society, indeed a relatively small subset
and possibly related credits like the Child Tax Credit. of the business community, to bear the burden of a
minimum wage hike. If we as a nation are unwilling
Both policies as currently implemented substantially to find the broad spending reductions or broadly
raise economic security by increasing the purchasing imposed tax increases needed to pay for these
power of low-income families. Further, proposals reforms, then we should just shelve them and the
abound to make them more generous and more minimum wage debate altogether.■
effective. As generous as some of the suggested
minimum wage hikes? Yes. South China Business Journal 20
the whole burden. Obama proposed major reforms to the EITC. More
recently, Isabelle Sawhill and Christopher Pulliam
Yet this is precisely the effect of a minimum wage, of Brookings provided a fine overview of the issues.
raised or otherwise. It is a transfer of income to a select The Tax Policy Center has advanced some useful
few, paid for at least initially by the businesses, most ideas. Jason Fichtner of George Mason University’s
typically the small businesses, who hire them. This Mercatus Center and Indavar Dutta-Gupta of the
leads to the obvious question: What sin have these Georgetown Center on Poverty and Inequality have
businesses committed in hiring low-wage workers that proposed other EITC reforms advertised as explicitly
they should be punished this way, paying the total cost “bi-partisan.”
of a social policy?
Tax reform addressing issues raised by the
The costs of a social policy should be systematically minimum wage debate would be expensive, no
socialized, not heaped upon an unfortunate few. doubt, which raises the issue of spreading the costs
Fortunately, we already have mechanisms in place to widely. The magnitude of the expense underscores
achieve the policy goal associated with a minimum the wrong inflicted by asking a relatively small
wage: Reforming the Earned Income Tax Credit (EITC) portion of society, indeed a relatively small subset
and possibly related credits like the Child Tax Credit. of the business community, to bear the burden of a
minimum wage hike. If we as a nation are unwilling
Both policies as currently implemented substantially to find the broad spending reductions or broadly
raise economic security by increasing the purchasing imposed tax increases needed to pay for these
power of low-income families. Further, proposals reforms, then we should just shelve them and the
abound to make them more generous and more minimum wage debate altogether.■
effective. As generous as some of the suggested
minimum wage hikes? Yes. South China Business Journal 20
