Friday, August 04, 2006

What did I tell you?

Looks like the Senate killed the House of Representative's extortion bill, which tried to tie a minimum wage increase to a huge cut in estate taxes.

What made this bill so bad? Well, here's a quote from
Even for veterans of minimum wage horse trading, the coupling of the bill to repeal most of the estate tax with a minimum wage increase set a cynical new low. The increase in the minimum, to $7.25 by 2009, simply replaces the value by which inflation has eroded the wage over the past few decades, giving a direct lift worth around $1,200 per year to about 6 million low-wage workers. And it does so without adding to the $300 billion budget deficit.

The estate tax reduction—which clocks in with a 10-year cost of $268 billion—returns about $1.3 million to 8,200 wealthy estates, according to the Center on Budget and Policy Priorities. CBPP also points out that the size of the tax cut would grow with the size of the estate; as many as 900 estates worth more than $20 million would receive an average tax cut of $5.4 million in 2011.

It gets worse. The lobbyists for the National Restaurant Association managed to inject a paragraph into the minimum wage part of the bill that would have significantly lowered the pay of minimum wage workers who work get tips (like waitpersons) in seven states.

So what we would have been forced to endure was a toothless increase in the minimum wage, while the very wealthy would have gotten yet another tax cut. Fortunately, enough saner minds prevailed in D.C. to shoot down this extortionist tactic, though the Republican Noise Machine may yet be able to use the Senate's failure to pass it as a weapon with which to attack Democrats for the midterms this November.

Next entry: Why Connecticut Must Tell Republican Joe "NO."

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