After that decision, Senate Finance Chair Ron Wyden (D-Ore.) and Senate Budget Chair Bernie Sanders (I-Vt.) said they would instead seek to add tax penalties on large corporations that fail to pay $15 an hour — an idea viewed as less likely to be struck down by the parliamentarian and still helpful to some minimum-wage workers.
But now senior Democrats — including Wyden and Sanders — are walking away from that backup effort, according to two people who spoke on the condition of anonymity to share internal discussions.
Economists and tax experts have said that the tax outlined by Sanders and Wyden could be easily avoided and difficult to implement, with large corporations able to reclassify workers as contractors to avoid potential penalties. “I would be extremely nervous about trying out a brand new idea like this with virtually no vetting,” Jason Furman, a former Obama administration economist, said on Twitter on Friday.
Wyden and Sanders were also expected to face an uphill battle in persuading the entire Senate Democratic caucus to support a proposal they would have only days to draft. The White House has not indicated support for the corporate tax penalty idea.