In my view, the minimum wage should have been linked to the Consumer Price Index years ago, so that increases would keep up with inflation yet rise slowly enough — relative to the economy as a whole — so that employers would be able to absorb the increase in costs without undue hardship. I speak as a former business owner. Every time the wage scale went up 5 percent, that sucked $10,000 a year out of our cash flow — no small sum.
If Congress gets automatic wage hikes, so should our lowest-paid workers. The parallel issue is that the increases need to be phased in slowly, so that small businesses aren’t overrun by costs they cannot easily absorb. (I won’t get into the monstrosity that is Obamacare here.)
Also, a look at Social Security tax rates over the past 30 years shows that rates continually have been increased over time, as the need to do so became apparent. In my view, we should lift the cap on earnings and increase the tax rate to at least 8 percent, or maybe 8.5 percent, to better stabilize the system as a whole. Small increases would minimize the burden on taxpayers and employers, but the increase in income to the system is magnified because it’s multiplied by millions of contributions each year.
The politicians who locked themselves into pledging, “No new taxes at any time, for any reason,” are making an enormous mistake. It is far better to increase the minimum wage and taxes minimally, especially if that also reduces poverty levels across the board. Otherwise, the overall social costs of more poverty will be far greater in the long run.
Jack Kingston, are you listening?
— Rafe Semmes