I hereby challenge Brad Delong to explain why an increase in the minimum wage is better than a payroll tax reform reducing the lowest tax rate so that full time (or less) minimum wage workers have the same take home pay as with a minimum wage increase and paying for it by removing the cap (and maybe shudder even making the top marginal payroll tax rate higher than the standard rate).

The incidence is different. My plan hammers high wage workers the minimum wage consumers especially hamburger eaters who are poorer. I don't see why my proposal adds any administrative costs.


The EITC is complicated and expensive to administer because congress wants to send the money to people who need it. If you are willing to send money to working teenagers, there is no need to make their employers supply it. The effects on employment of the minimum wage seem to have been grossly overestimated. However most (all but one ?) point estimates show negative effects. Why make employers pay ? I mean except to hide the cost off budget of course.

balance things at the margin only works if you are close to an optimum which our fiscal system sure isn't.

p.s. I better get on doing something useful before the day of wrath.