Minimum Wage Hike Passes With Huge Tax Cuts genre: Econ-Recon & Polispeak & Six Degrees of Speculation
In an expected move, House Republicans passed a minimum wage increase but the measure includes significant changes in the estate tax structure...removing the tax altogether for many wealthy Americans and capping the tax rate at 30 percent for estates exceeding 25 million dollars. The Washington Post has the full article here. Thought Theater previously discussed the measure and the tactics being employed by the Republican controlled House.
The House, at about 1:30 a.m. yesterday, voted 230 to 180 to raise the minimum wage to $7.25 an hour, from the $5.15 rate on the books since 1997. The bill also would exempt from taxation all estates worth as much as $5 million -- or $10 million for a married couple -- and apply a 15 percent tax rate to inheritances above that threshold and as much as $25 million. For estates exceeding $25 million in value, the tax rate would be 30 percent.
Most congressional Republicans support the estate-tax cuts and oppose the minimum wage increase. Most Democrats take the opposite positions. Democrats said they saw a two-edged strategy in the GOP decision to couple the issues.
Democrats' eagerness to raise the minimum wage might attract enough support in the Senate as well as the House to pass the estate-tax cut, a major GOP goal. But if Senate Democrats block the bill because of their aversion to the estate-tax cut -- as their leaders have vowed to do -- House Republicans may at least be able to blunt Democratic accusations that they made no effort to help the working poor.
The move, by Republicans, is simply an attempt to neutralize an issue they see as a vulnerability this November. They see a benefit whether the bill is passed or rejected in the Senate. If the bill is rejected they believe they can argue that they sought to help low wage workers but the Democrats refused to endorse the proposed legislation. If the bill is passed, they not only enacted a minimum wage increase but passed their long sought estate tax reform. This will be a key test for Senate Democrats and may signal whether the Party can muster the consensus needed to defeat this measure as well as begin the process of speaking with a strong and united voice.
Daniel DiRito | July 30, 2006 | 8:37 AM
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