Minimum wage and tax deduction are on the Congressional radar - Trade Only Today

Minimum wage and tax deduction are on the Congressional radar

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There hasn't been much coverage yet of Congress increasing the minimum wage, but it doesn't mean the idea hasn't got legs. In fact, it has considerable support, even if the amount of the increases varies depending on the legislator.

For example, President Obama's proposed budget calls for a new minimum wage of $9 per hour, up significantly from the current $7.25. Trumping the President's figure is Sen. Tom Harkin, D-Iowa, who is already sponsoring S.460 that would hike the minimum wage to $10 an hour. What's notable is that Harkin already has 30 other senators signed on as co-sponsors.

In the House, a companion bill (H.R.1010) at $10 per hour was introduced by Rep. George Miller, D-California. His bill already has 140 co-sponsors on it.

"The significant number of co-sponsors in both the House and Senate," MRAA Washington lobbyist Larry Innis says, "certainly increases the chances of passage. If that were to happen, it's likely to have a negative impact on dealerships and job creation and that's why we are following it closely. On the other hand, it's certainly not a done deal. A big challenge can be expected in the House. That said, however, we'll keep the issue very high on our MRAA radar.”

As a sidebar, be happy you're not a dealership in Washington, D.C. or you'd be watching the D.C. City Council consider passage of a "living wage" bill requiring a minimum of $12.50 an hour. Interestingly, the AP reports that Wal-Mart is threatening to walk away from three planned stores in the District if the council passes such a bill.

An equally strong blip on the MRAA scope is the second-home mortgage deduction. It's potentially in play once again as Congress considers major tax reform. That's not to ignore the prospect that a major stumbling block is that GOP senators believe Democrats will insist higher revenues be included in any such bill and that, they say, will make any real tax reform doubtful.

Senate Finance Committee chairman Max Baucus, D-Mont., and Sen. Orrin Hatch, R-Utah, the panel’s top ranking Republican, have given all senators until July 26 to make the case for credits and deductions that they think should be written into a tax reform bill. But it’s unclear how many senators will participate.

Clearly, the second-home mortgage deduction has a positive impact on the sale of larger boats and sustaining it has been a principled position of the marine industry. And, there's some good news in that a House Concurrent Resolution was submitted by Reps. Gary G. Miller and Brad Sherman (both California Democrats) that: "Resolved by the House of Representatives (the Senate concurring), that it is the sense of the Congress that the current federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted."

The resolution has been sent to the House Ways and Means Committee, and while a resolution is always non-binding, it does add solid support for the industry's desire to see the second-home deduction maintained if tax reform should actually happen.

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