Minimum Wage and Estate Tax Go Down Together
A bill that would have increased the national minimum wage and repeal portions of the estate tax (AKA the death tax) never made it to a vote in the Senate as Democrats and a couple of Republicans voted against ending debate on the measure.
Opponents said the bill proposal was disingenuous as Republican sponsors sought to gain another tax break for the wealthiest of Americans while making it appear as though lower income citizens were benefiting.
Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees (AFSCME), told The Washington Post, “This was a transparent attempt to dangle a minimum-wage increase for families struggling to make ends meet to secure yet another Texas-size tax handout for the wealthiest.”
Senate Minority Leader Harry Reid (D-Nev.) said, “8,100 of the wealthy and well-off hit the jackpot, while millions of working families get $800 billion in [federal] debt.”
Democrats such as Sen. Reid are generally in favor of raising the minimum wage while against repealing the estate tax. Conversely, most Republicans favor repealing the estate tax but are against any mandated change in the minimum wage.
Sen. John Sununu (R-N.H.) said polls show voters want an increase in the minimum wage and also want to do away with the “death tax.” Voting against allowing the measure to go for a simple yay/nay vote “is bad for the country, and bad politics, too.” The Senator said, “I certainly wouldn’t want to vote against this bill.”
Discussion Question: Would passage of the bill proposed by the Republican majority have been good or bad for the retail and foodservice industries?
The retail and foodservice industries have generally supported repeal of the estate tax while lobbying against any increase in the minimum wage.
It should be noted that the bill introduced would not have resulted in a total repeal of the estate tax. According to The Washington Post, “estates
worth as much as $5 million ($10 million for a married couple) would have been exempt. Estates worth between $10 million and $25 million would have been taxed at 15 percent tax
while those above $25 million would have been taxed at 30 percent.
The most notable exception on the minimum wage issue has been Wal-Mart CEO Lee Scott who has called on the federal government to make an increase to help
lower-income consumers deal with rising costs.
More money in the pockets of consumers is always good for retailers, even those that would find themselves having to pay their workers more as a result of an increase in the minimum wage.
Getting rid of the estate tax is a good idea in theory, but with the pressing budgetary problems facing the government as a result of paying for ever growing defense department needs, entitlement programs, etc., it seems as though this is an idea that can wait.
The two issues should never have been bundled together in the first place. Politicians should look at what they’ve done here and stop wondering why the public has lost faith in their leaders. This and all other issues in Washington aren’t about conservative or liberal or any other simple-minded label the media or others want to apply to the various parties and players in the nation’s capital. Pure and simply, it’s about power — who has it and who does not.
Bills proposing a minimum wage increase and elimination the estate tax should not have been bundled, since they are two separate issues.
That being said, if given the opportunity, I would have voted for both measures. I think an increase in minimum wage is overdue. I believe that the portrayal of the estate tax as a “tax break” is misleading. The money contained in an estate has already been taxed.
Both parties should have the acronym “TRU” attached to their names — Transparency R Us. The politics are so obvious as to be painful, and Lee Scott’s position is only slightly less so, as David Livingston points out.
How about both parties catch the tax-paying consumer’s drift? NO TAX is welcome. Period. Unless it is by those who don’t pay taxes, whether they live below the line or so far above it that they can afford to dabble in socio-economic reform. And that leaves most of our hardworking industry out.
I don’t know if the bill would have a huge affect on the industry or not.
Estates of $5 to $10 million dollars are commonplace now for middle class business owners and farmers. They should be exempt and estate tax should only be imposed on the wealthy, such as $25 million or higher. However with good estate tax planning, taxes can be avoided almost at any level.
The minimum wage should be repealed and forgotten. Wal-Mart, which pays significantly higher wages than minimum wage, would love to see their lessor competitors forced into financial difficulty by having their labor costs increased. This would also put more money in the pockets of Wal-Mart customers.
With unemployment rising again as well as the cost of living, the minimum wage needs to improve. Whether or not the estate tax was changed, frankly, is inconsequential to most Americans. That it was tied to minimum wage was not. Pure politics.
Raising the minimum wage helps most retailers, although most don’t know that. Since every law-abiding retailer has to pay the higher wage, few are disadvantaged. Yet the increased wages let customers buy more. Most retailers assume increased wages simply reduce profits, which might be true if (1) no other retailers increased wages and (2) if staff selection and turnover was unchanged.
Obviously estate taxes have nothing to do with the minimum wage. The bills should have been separate. More and more of America’s wealth is being concentrated in 1% of the population. Greater concentration of wealth undermines democracy.