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November 16, 2009

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Higher minimum wage will be eaten up by more taxes

Friday, April 5, 1996 | 11:59 a.m.

Instead of raising it to $5.15 an hour, why not an even $6 or $7 or $10?

Why does the federal government decide how much a business must pay its workers? Also, something no one ever brings up -- taxes.

Anyone who works knows the more you make, the more the government takes. Using Reich's formula, $4.25 times 40 hours times 50 weeks equals $8,500 a year.

If the minimum wage is raised to $5.15 using the same hours and weeks, the yearly amount equals $10,300. This comes out to $1,800 more a year.

How much will a worker actually see of this $1,800? Federal tax, state tax and Social Security will all go up.

In high-tax states like New York and North Carolina, how much more will state and city governments take?

If the poverty level is defined as making less than say $8,500, raising the minimum wage to $5.15 on paper, will wipe out a lot of poverty.

Since the government loves to use stats and data, they can honestly say, because of government, poverty in American has gone down.

Michael Moreno

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