Citizens for Tax Justice
1311 L Street, NW
Washington, DC
Monday, Oct. 18, 1999
CONTACT: Bob McIntyre,
202/626-3780
Minimum Wage Plan Targets Three-Quarters of Its Tax Breaks to Top 1%

Click here to see this analysis in PDF format.



Tax breaks included in the minimum wage increase bill introduced by Rep. Rick Lazio (R-NY), John Shimkus (R-IL) and others would cut taxes by close to $100 billion over the next decade, with almost three-quarters of the tax cuts targeted to the best-off one percent of Americans.

An analysis of the tax provisions of the Lazio-Shimkus bill released today by Citizens for Tax Justice finds that:

"It's astonishing that a minimum wage bill supposedly designed to aid low-wage workers would actually give its biggest benefits to the highest-income people in the country," said Citizens for Tax Justice director Robert S. McIntyre.

The Lazio-Shimkus bill would:

Official revenue estimates of the cost of the Lazio-Shimkus bill has not yet been released by the Joint Committee on Taxation, but based on earlier JCT estimates of similar provisions, the tax cuts would appear to cost approximately $97 billion from fiscal 2000 to fiscal 2009.

A table detailing the distributional effects of the bill follows.

Effects of the Lazio-Shimkus Tax Cuts in the Minimum Wage Bill
(Annual effects at 1999 levels; $-billion except averages)
Income Group Income Range Average Income Estate Tax Cuts Corporate Tax Breaks Pensions & 401Ks Total Tax Cuts Average Tax Cut % of Total Tax Cut
Lowest 20% Less than $13,300 $ 8,400 $ 0.0 $0.0 $ 0.0 $ 0.0 1 0.3%
Second 20% $13,30023,800 18,300 0.0 0.1 0.0 0.1 3 0.8%
Middle 20% $23,80038,200 30,300 0.0 0.2 0.0 0.2 7 1.6%
Fourth 20% $38,20062,800 49,100 0.0 0.3 0.0 0.3 12 3.0%
Next 15% $62,800124,000 83,600 0.0 0.4 0.1 0.5 28 5.1%
Next 4% $124,000301,000 173,000 0.8 0.5 0.4 1.6 321 15.7%
Top 1% $301,000 or more 837,000 5.6 1.3 0.7 7.6 5,999 73.4%
ALL $48,700 $ 6.4 $2.7 $1.2 $ 10.3 81 100.0%
ADDENDUM
Bottom 60% Less than $38,200 $ 19,000 $ 0.0 $0.3 $ 0.0 $0.3 4 2.7%
Top 10% $89,000 or more 204,000 6.4 1.9 1.1 9.5 748 91.7%
Notes: Figures show the annual effects of the approximately $97 billion in tax cuts over the next 10 years included in the Lazio-Shimkus minimum wage increase bill. All provisions are measured as fully effective, at 1999 income levels. Estimates are from the Institute on Taxation and Economic Policy Tax Model.
Citizens for Tax Justice, October 18, 1999

Back To Reports