Small Business Wage Bridge Act

Too many Americans work full time and still cannot afford the basics. The federal minimum wage has remained at $7.25 an hour since 2009, while the cost of housing, groceries, healthcare, utilities, and nearly everything else has continued to rise.

My Small Business Wage Bridge Act would gradually raise the federal minimum wage to $15.00 an hour while helping qualifying small businesses manage the transition. Workers receive the raise they have earned, local businesses receive temporary support, and the largest corporations and industries give up tax advantages to help fund the bridge.

Only $7.25

The federal minimum wage since 2009

A responsible path to higher wages and stronger small businesses.

A person working 40 hours a week at the federal minimum wage earns just $15,080 a year before taxes. That is not enough to build a stable life, support a family, or keep pace with today’s cost of living.

At the same time, we cannot ignore the concerns of small-business owners. A multinational corporation can spread higher payroll expenses across thousands of locations. A family-owned restaurant, neighborhood hardware store, or small rural business does not have that same flexibility.

We should not have to choose between paying workers fairly and protecting the local businesses that hold our communities together.

The Small Business Wage Bridge Act raises the federal minimum wage from $7.25 to $15.00 over five years. During that transition, qualifying small employers would receive a temporary, refundable payroll-tax credit covering part of the increased wage cost. The credit gradually decreases as businesses adjust and ends after the transition is complete.

The wage goes up. Small businesses get help crossing the bridge. The temporary support ends when the crossing is complete.

The challenges Congress must address…

  • Workers have gone more than 17 years without a federal minimum-wage increase. During that time, the cost of rent, food, healthcare, transportation, and utilities has continued to climb.

  • Someone working full time at $7.25 an hour earns only $15,080 annually before taxes. No one who works full time should remain trapped in poverty because Congress refuses to act.

  • A sudden jump in labor costs could place real pressure on small employers, especially those operating on narrow margins. That concern should shape how we raise wages, but it should not become an excuse to leave workers behind.

  • Our local businesses depend on working people, and working people depend on strong local employers. A responsible plan should support both sides of that relationship.

  • This plan uses two tax-code funding streams and a supplemental fraud-recovery stream to bridge the minimum wage increase.

  • The cost of the credit and the revenue generated by each funding source must be independently scored and publicly reported. If the funding produces more than the credit costs, the public should know. If it produces less, Congress should be required to address the difference.

The Small Business Wage Bridge Act

The Small Business Wage Bridge Act is built around six provisions designed to raise wages, protect qualifying small employers, and give the public an honest accounting of what the transition costs and how it is funded.

  • The Act raises the federal minimum wage from $7.25 to $15 in five annual steps:

    • Year One: $8.80

    • Year Two: $10.35

    • Year Three: $11.90

    • Year Four: $13.45

    • Year Five: $15.00

    After reaching $15, the minimum wage would be indexed to the national median wage so workers are not forced to wait another 17 years for Congress to act.

    The gradual schedule gives workers meaningful raises while providing employers with a public, predictable timeline they can use to plan future payroll expenses.

  • The Act creates a temporary, refundable payroll-tax credit for employers with 50 or fewer employees and less than $5 million in annual gross receipts.

    The credit would reimburse qualifying businesses for a portion of the increased wage expense. It begins by covering 75% of the incremental raise during the first year and then gradually decreases until reaching zero in year six.

    Because the credit is refundable, qualifying small businesses could benefit even when they do not owe enough in taxes to claim a traditional nonrefundable credit.

    This is a bridge, not a permanent subsidy. It gives local employers time to adjust while ensuring workers do not have to wait any longer for a raise.

  • The Act would repeal five specified federal tax provisions benefiting the oil and gas industry and direct the resulting revenue into the Small Employer Wage Credit Fund.

    Those provisions include:

    • The intangible drilling-cost deduction

    • Percentage depletion

    • The passive-loss exception for certain oil and gas working interests

    • The Master Limited Partnership exemption

    • Certain foreign-tax-credit treatment of royalty payments

    These are specific provisions in the federal tax code that Congress can repeal and the Joint Committee on Taxation can score.

    The proposal estimates that repealing these provisions could generate approximately $19.1 billion over five years, subject to an updated official score.

  • The Act would direct a portion of money actually recovered from Paycheck Protection Program and Economic Injury Disaster Loan fraud into the Small Employer Wage Credit Fund.

    This is money already owed to the federal government. It is not a new tax or a new fee.

    However, the legislation recognizes an important distinction: money referred for collection is not the same as money successfully recovered. For that reason, fraud recovery would be treated as a supplemental funding stream and reported separately from the two tax-code repeals.

    Only money actually collected could be counted.

  • The Act would repeal the tax deduction under Section 250 of the federal tax code that provides a lower effective rate on certain income multinational corporations earn from patents and intellectual property held in the United States.

    The resulting revenue would be directed into the same Small Employer Wage Credit Fund and protected for use in funding the temporary credit.

    An earlier Joint Committee on Taxation estimate placed the potential revenue at approximately $64 billion over 10 years. The legislation would require a new score reflecting the current tax code before introduction.

    Instead of preserving a tax advantage used by some of the largest corporations in the country, we can use that revenue to help neighborhood businesses raise wages.

  • The Act requires the Joint Committee on Taxation to publish an annual reconciliation comparing:

    • Revenue generated by the oil and gas tax changes

    • Revenue generated by the Section 250 repeal

    • Money actually collected through fraud recovery

    • Wage-credit dollars paid to qualifying small employers

    • Any surplus or shortfall in the fund

    The fraud-recovery stream must be reported separately so that money referred for collection cannot be presented as money already recovered.

    The small-employer credit would automatically end after the phase-in. Any remaining surplus would return to the general Treasury instead of becoming a permanent fund or subsidy.

    We should not have to choose between paying workers fairly and protecting the small businesses that hold our communities together.

If Congress expects small businesses to help raise America’s wage floor, Congress has a responsibility to help them cross that bridge.

1. Oil and gas tax provisions

The repeal of five specified tax advantages is estimated to generate approximately $19.1 billion over five years.

The current proposal creates three funding streams:

2. The Section 250 deduction

Repealing this deduction would provide the second major revenue stream. An earlier estimate projected approximately $64 billion over 10 years, but a new Joint Committee on Taxation score would be required.

3. PPP and EIDL fraud recovery

Money actually recovered from pandemic-loan fraud would supplement the two tax-code funding streams. Because collections are uncertain, this revenue would never be treated as guaranteed.

The money would flow into a protected Small Employer Wage Credit Fund that could be used only for the temporary wage credit. Congress would receive a public reconciliation every year showing exactly how much revenue was collected and how much was paid to qualifying employers.

This proposal does not pretend estimates are guarantees. It requires the government to score the credit, measure each revenue stream, report the results publicly, and end the credit when the transition is complete.

Raise the wage. Protect small businesses. Show the math.

For too long, Washington has treated workers and small businesses as if one must lose for the other to succeed.

I reject that choice.

We can raise the federal minimum wage. We can protect the local employers who create jobs and strengthen our communities. And we can pay for the transition by ending tax advantages for massive corporations and directing recovered fraud dollars toward the businesses doing the right thing.

The floor goes up. Small businesses receive a bridge. The public gets the receipts.

How we will pay for it

Raising the minimum wage does not directly require federal spending. The cost addressed by this legislation is the temporary payroll-tax credit that helps qualifying small businesses manage the transition.

Because the credit has not yet received an official score, the proposal uses an estimated six-year cost range:

  • Approximately $20 billion under the low-cost scenario

  • Approximately $33 billion under the central scenario

  • Approximately $56 billion under the high-cost scenario

Before introduction, the Joint Committee on Taxation and Congressional Budget Office should produce an official estimate of the credit’s cost and updated scores for the funding provisions.