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Wednesday January 31, 2007
INDIANAPOLIS
Legislation that would raise the state’s minimum wage
and lessen the impact of the inheritance tax passed the House
Tuesday on a 71-29 vote, with only Republicans voting against
it.
The bill would increase Indiana’s minimum wage from
$5.15 an hour to $7.50 an hour by 2008. The legislation would
also change how much inheritance children or other descendants
could receive tax free. Currently, the first $100,000 is exempt,
but the bill would bump that threshold to $200,000.
Some Republicans who support the inheritance tax measure
but do not want to increase the state minimum wage said the
two proposals should not be in the same bill.
“These are two issues which are just not related at
all,” said Rep. Tim Harris, R-Marion, who voted for
the legislation.
Rep. Michael Murphy, R-Indianapolis, said he would vote for
the proposal because the inheritance tax was important, while
raising the minimum wage would not have a great impact on
many businesses.
“I can’t find anybody who still pays $5.15 an
hour,” Murphy said. “The market has moved beyond
this political debate.”
At the current state and federal minimum wage of $5.15 an
hour, a full-time worker makes about $10,700 a year. At $7.50
per hour, the annual salary is about $15,600 - just above
the average poverty threshold for a family of three in 2005.
The bill would increase the minimum wage to $6 an hour on
Sept. 1, to $6.75 on March 1, 2008, and to $7.50 on Sept.
1, 2008.
Even if Indiana’s rate doesn’t change, minimum
wage workers in the state could be getting a pay raise. Congress
is moving forward with a plan to raise the federal minimum
wage from $5.15 to $7.25 an hour over two years. If both plans
succeed, the higher of the two wages would be paid to most
minimum wage employees.
Of Indiana’s roughly 1.8 million hourly workers, about
2 percent, or 37,000, make $5.15 an hour or less, according
to 2005 data from the Bureau of Labor Statistics.
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