Peterson votes to raise minimum wage, reduce burden of Death Tax
Bill also extends several key tax relief measures, and provides new 60 percent timber deduction
Washington, DC - U.S. Rep. John E. Peterson (PA-05) joined his colleagues in the House early this morning in passing legislation that would both raise the federal minimum wage and greatly reduce the financial burden of the federal Death Tax on American farmers, small business owners, and timber holders. The underlying bill - in name the Estate Tax and Extension of Tax Relief Act, but, in reality, an amalgamation of several important measures - passed the House by a vote of 230-180.
"It's been nearly a decade since we took a look at raising the federal minimum wage," said Peterson. "In that time, the price of food has gone up, housing costs have almost doubled, and energy costs are making deep cuts into the family budget and forcing too many people in my district to lock their thermostats below 60 in the winter."
Added Peterson: "I'm not one who believes that the minimum wage should be raised on a whim, but I also believe that we have a responsibility to ensure that hard-working folks in this country can provide for their families as the cost of living and essential services steadily continues to increase."
Under the direction of this bill, the current federal minimum wage rate of $5.15 per hour would be raised by $2.10 over three years in a series of increments. It would reach $5.85 an hour on January 1, 2007, $6.55 on June 1, 2008 and $7.25 on June 1, 2009.
In addition to making changes to the federal minimum wage laws, the bill also provides permanent death tax relief for individuals and small businesses that would otherwise be forced to surrender as much as 55 percent of their assets to the federal government upon death.
"The Death Tax is one of the least equitable, most poorly administered taxes ever devised by the federal government," said Peterson. "It punishes farmers and small business owners for the hard work they put into our economy, and negatively affects the millions of Americans they annually employ. It's a tax that penalizes the wrong people for doing the right things."
Legislation passed today would increase the Death Tax exemption amount to $5 million per person and $10 million per family, and index it to inflation - protecting small businesses and farms throughout the Fifth District from being burdened by the tax. The legislation also significantly reduces the Death Tax's double taxation on larger estates while also including a new 60 percent deduction for qualified capital gains on timber sales, providing a much needed economic boost to our region's forestry industry.
The bill additionally contains a package of equitable tax provisions that lessen the tax burden on a broad cross-section of the American public. Of particular note are the Research and Development tax credit, which allows businesses to gain tax credits for qualified research expenditures; a provision that allows independent oil and gas producers to deduct 15 percent of a marginal well's gross income each year; an above-the-line deduction for teachers, allowing them to deduct up to $250 of out-of-pocket costs to purchase books, supplies and other classroom equipment; and the Work Opportunity Tax Credit (WOTC), encouraging business owners to hire individuals from historically under-represented groups, such as families receiving public assistance, high-risk youths, and qualified veterans.
The Estate Tax and Extension of Tax Relief Act of 2006, numbered H.R. 5970, will now be sent to the U.S. Senate for further consideration.
http://www.house.gov/list/press/pa05_peterson/072906min.html