Thursday, August 03, 2006

Estate-tax cut cut by Senate

But poor people still pay the price

WASHINGTON - A Republican election-year effort to fuse a cut in inheritance taxes on multimilllion-dollar [sic!] estates with the first minimum wage increase in nearly a decade was rejected by the Senate late Thursday.

Republicans needed 60 votes to advance their bill, which links a $2.10 increase in the $5.15 federal minimum wage over three years to reductions an estate taxes next decade. Passed by the House last Saturday, the bill got a 56-42 vote, four votes short of succeeding.

The GOP strategy put Democrats in an uncomfortable position. Either they could vote against the bill — thus rejecting a minimum wage increase — or they could vote for it — thus agreeing to cut taxes on multimillion-dollar estates. Most rejected the bill, blocking a GOP victory months before the election.

Note to fellow progressives: the next time a conservative accuses the Democrats of playing politics with the economy, throw this in their faces. Or, if you're feeling particularly adventurous, print out the article, crumble it up and shove it into their mouths.

The Republicans knew an estate tax wouldn't pass, because no one is buying that "death tax" crap anymore. The estate tax affects only the bracket of earners that, in saner times, no one with an income less than Paris Hilton's would give a damn about. For these people, a cut in the estate tax is a luxury, so it's not like they'll die if they don't have it. On the other hand, an increase in the minimum wage is the last thing any CEO wants, so tacking this on to the minimum-wage hike would either ensure the bill's failure or (if passed) temper the hit to the plutocratic wallet. It's a win-win for the right.

Democrats, on the other hand, look like jerks no matter what they do. If they vote for the increase, then they appear to have caved in to the interests of the elite (and deprive the tax base of a significant revenue source). If they don't vote for the wage increase, then they appear to not care about the working poor. Lose-lose. The GOP knows this, which makes this bill rather ingenious. Pathologically evil genius, but genius nonetheless.

This action speaks volumes about why the Republicans roll on to victory after political victory: it isn't because they're right, but because they frame the debate in ways such as these. It's rhetorical gerrymandering!

Of course, if the public would wise up to such politics, then all of this would be a moot point. While we wait for this, I'll be in the corner holding my breath.


Cajun Tiger said...

Would someone please show me in the Constitution where it says that EVERY vote in the Senate must have 60 votes to pass!

Anonymous said...

If so few people are affected by the estate tax, how much revenue can it possibly generate? Either it is more people than you say or the revenue is not substantial. Assuming very few people are affected by the estate tax, why not just pass the bill?

It's politics. The left wants to claim that the republicans kept the minimum wage increase from happening with their ammendment. In reality, democrats get huge contributions from corporations and they don't want to jeapordize them.

I can't beleive these people let poltics come before America.

Nick said...

"an increase in the minimum wage is the last thing CEO's want"

Taking that quote, if true, then one would assume that successful CEO's want to pay their employees the bare minimum. If that is true, then the "evil" oil companies must be paying everyone minimum wage, right? Wrong. Again, I've said it hundreds of times and will say it again. Good, successful companies DO NOT pay minimum wage.

Oil companies are, in general, the most successful right now, right? Record profits and all. Well, people without even entering college are making excellent wages and even able to support families. The market determines the wage.

But you know who does get minimum wage? It's mostly high school kids who don't give a damn about their jobs or helping the company. Minimum wage earners are usually what I like to call the mouth breathers. They stand there chewing on their gum and the Home Depot and can't tell you where the flat washers are b/c they don't know shit and don't care. Those are the ones who are making minimum wage, which in my opinion, aren't even worth $5.15/hr.

Ian McGibboney said...

CT, 60 out of 100 is a three-fifths majority, and is used routinely for a variety of Senate rulings. I didn't see that specific figure in the Constitution, but then again lots of things we do today aren't in there.

Anon, it's not that so few people are affected by it, it's just that those who are pay roughly a fifth on estates worth $5 million or more. It's a fair tax and we can't afford to lose any more sources of revenue in these times of record deficits. Where's the sense in cutting that tax?

Nick, I think that everyone who takes the initiative to work should earn a living wage. It's not fair to judge your assessment on the minimum wage on teenage slackers. I guarantee you that a LOT of adults trying to support families on that wage, and it doesn't even come close to making ends meet. Conversely, lots of well-paid employees slack around just as much.

And yes, plenty of "good, successful companies" DO pay minimum wage. McDonald's is one of the most successful companies in the world, and it isn't exactly known for taking care of its employees. Wal-Mart as well. These days, there's far more profit in treating employees as expendable commodities than caring for them with livable wages and benefits.

If CEOs seem so benevolent to you, it's because they're sitting pretty: "The average corporate CEO earns more before lunchtime on the first workday of the year than a minimum-wage worker earns all year, according to a new analysis from the Economic Policy Institute." --link

Michael said...

I'm going to disagree with you on the framing thing, too, Ian. I think the Republican leadership forgot everything it ever knew (or thought it knew) about framing with this one. When the bill passed the House, it was widely noted in the press that it had virtually no chance of passing in the Senate--and that a number of electorally threatened House Republicans had apparently relied on that fact when they voted for it.

Plus, this is a classic instance of "I was against it before I was for it" behavior. The Republicans have been in control of Congress since the last time the minimum wage was increased, yet they've never apparently felt a need to increase it until now, when their polling data looks like the value of Enron stock. I forget if it was the Senate or the House, but one of the two chambers has procedurally blocked each and every attempt even to bring up the question of a raise in the minimum wage for a vote for the last ten years.

And as you point out, this "death tax" thing isn't working for them at all anymore, either. As I see this bill, it was a lose-lose proposition for the Republicans. Sure, they'll try to use it against the Democrats this fall, but I don't expect it will get very far--and the minute they bring up the issue, they can count on getting hammered with some pretty vicious replies.

This was a sleeping dog they should have left lying.

Anonymous said...

I am pretty drunk right now, so I can't make any really good points, but the Democrats need to do a better job at summarizing the Republicans' dirty politics and communicating them to the 95% of the country that doesn't know who Karl Rove is.

Cajun Tiger said...

When will liberals get this through their thick skulls. Minumum wage increase does nothing to help the poor. It HURTS the poor. The big "evil" companies won't take a hit in their bottom lines. They will raise prices to compensate for being forced to pay employees more. So, by trying to help it hurts the ones it is supposed to help. This is just political pandering pure and simple.

If you work for minimum wage for more than a year then obviously you have no skills b/c anyone with any amount of skill doesn't stay there long.

My first job was minumum wage and I got a raise in 3 months, then again in 6 months.

Minumum wage is for entry level jobs only and the majority are teenages as Nick pointed out...latest stat I've seen is over 70%.

Hillary For President said...

I total supporte the inncreese in are minimum wage. BUT it is VERY VERY improtant that BUSH make shure undocumnet immigrant's get the increase frist, sinse they half been take advantage four so long.

that what i thing.

Ian McGibboney said...

CT, if the minimum wage is what hurts companies' bottom lines so much, then why don't CEOs and everyone else earn $5.15 an hour? Wouldn't that really put a bite into operating costs?

"Oh, of course not," you'd say. "They're worth more than that." Perhaps. But going by your logic, paying living wages is what makes everything so expensive. Your logic is wrong anyway, because costs for virtually everything have skyrocketed in the past few years. Meanwhile, the minimum wage hasn't changed for a decade (the longest stagnation in U.S. history). Prices are going up because of endless war and energy boondoggles, not because people are asking to not starve.

Saying that the minimum wage is for ignorant nobodies is itself an ignorant statement. If the reason you don't support the wage increase is because you're an adherent of Reaganomics, fine. Idiotic, but fine. But to base that reasoning on your assumption of who's earning that wage borders on bigotry.

How's this for an assumption: I once worked at a fast-food joint. I was very good at what I did, and in fact regularly received praise from my bosses and customers (who'd sometimes call the place from home, telling them how good I was to them). Despite this, I never earned more than minimum wage. Granted, I was not there for a long time; but those who had been were pretty much in the same boat. Most of the workers there were not teenagers (I was 21); one was an honest, hardworking mother of two in her 40s who worked two jobs every day. These were not stupid people, or knuckle-draggers, or uneducated. They were just doing what all of us want to do--survive any way we can.

Finally, consider this--despite living at home, having a full college scholarship at the time and my apathy toward buying new stuff, I still burned the fast-food money as fast I made it. I don't even know HOW. Just eating, I guess. It's time to raise this thing.

Cajun Tiger said...

"granted I was not there for a long time" so let me left for a higher paying or better job?

Entry level jobs are just that, entry level. If you are a good employee and that company just doesn't give you the raise you deserve then you have earned marketable skills to go find another better paying job.

I have not earned minumum wage since I was a sophmore in high school.

Higher skilled jobs pay more b/c the market sets a standard for those jobs. If people would do them for less, companies would pay less in a heartbeat. Every company pays the least amount they can while maintaining the skill sets they need. That's economics 101!

Liberals always throw out the heartbreaking story of the single mom working two jobs barely getting by to try to tug the emotional drawstrings and while yes that is a very sad situation for the person, it is not the majority by any means.

Ian McGibboney said...

"I have not earned minumum [sic] wage since I was a sophmore [sic] in high school."

Good for you. But if you're talking about who isn't the majority of minimum-wage earners, I guarantee you it isn't high-school sophomores. Hell, it's harder than ever where I live to employ 15-year-olds anymore.

Speaking for myself, my career track has hardly been as linear as yours, CT. I've gone from no pay, to minimum wage, to scholarships, to minimum wage, back to no pay, to pretty good freelance project rates and to minimum wage back again. And while I'm not complaining about that, I don't think that people should be punished because it's a little harder for some people to find work than others.

The reason I left the job wasn't because I found something better. It was because the job was costing me more in fuel and medical bills (long story) than I was making. Is that crummy or what? I actually saved money by NOT having the job. What kind of testament to the work ethic is that?

And I beg to differ with you about the mother with two jobs. I didn't make that up to tear at your heartstrings (what a waste of time that would be). I mentioned it because I know PLENTY of people like her. Including family. It's no accident that you hear about about it, CT. They're prevalent, and pretending they don't exist won't make them go away.

I have a master's degree. If minimum-wage work is all I can get, fine. I won't complain. But I would ask that that wage not be set by those who think I'm a 16-year-old slacker.

Cajun Tiger said...

Ok...finally tired of generalities of "I know PLENTY of people." What is the percentage of people living below the proposed new minimum wage hike of $7.25?

I'll save you the trouble of looking it is 2% of the population. The average wage of a family containing a minimum-wage worker in the US is $45,000 (hardly the poverty level). This has been one of the Dems most effective issues in poorer areas due to exploitation of reality.

So raising the minimum wage would only "help" 2% of the population yet it would raise prices of goods for 100% of the population, including the 2% who can't afford it the most.

Nick said...

I was in Grand Isle this weekend, so now I'll respond.

"Everyone who takes the incintive to work should make a living wage"

Not if they don't give a damn and are incompetent and don't care to learn how to be efficient. If all they are doing is taking up space, then they don't even deserve minimum wage IMHO.

Yes, Wal-Mart and McDonalds do START many people at minimum wage. But they quickly up the pay of the quality workers, even move them up the ladder into a management or trainer position so that other companies do not take them.

CEO's are not benevolent to me. I've never said that. I don't think the retiring CEO of Exxon should have been given a $400 million package. That is absurd. Nevertheless, that is irrelevant to my point. Not every employee is worth $8/hr. Hell, some aren't even worth $3/hr. I've worked with some at Winn-Dixie, Casa Ole, and La Pizzeria who were like that.

Ian McGibboney said...

CT, where can I find those statistics? You fail to cite a source, and you know how I hate generalities.

I'm asking because I question the statistics. Not because I don't want to believe them, but because they don't add up to me. For all I know, that $45,000 family could have the kid making the minimum wage. I'm interested in working adults supporting families on minimum wage.

Percentage is irrelevant. ALL working Americans deserve a living wage. Besides, as of June 2000, the number of families living on welfare was 2.1 percent, and you guys can't bark enough about the impact of that percentage.

Nick, I still refuse, despite your repeated insistence, that we keep the minimum wage at an all-time low because of value judgments of who PROBABLY earns that wage. As frustrating as it no doubt is for us, idiots are entitled to a living wage too if they do the work.

But I still contend that not every min-wage worker is a knuckle-dragging jerk. On the other hand, there are more Billy Madisons in the world than we want to assume. Because of this, character is not a quantifiable factor in setting the wage. Until you can show me a study that shows otherwise, then it's a variable I won't even consider.

Jester said...

"print out the article, crumble it up and shove it into their mouths."

I thought that liberals were supposed to be for peace, tolerance, and nonviolence. Progressive? Maybe you're progressing backwards, say, back to the dark ages.

"ALL working Americans deserve a living wage."

Ok, that's fine. But exactly who decides precisely how much that "living wage" is? The Party? A Politburo? A dictator for life? You?

Ian McGibboney said...

Jess, I just thought I'd speak in terms you could understand and appreciate.

As for the living wage, let's use the mathematical formulas that we've been using for decades to calculate cost of living--you know, the ones saying that the minimum wage is at its lowest spending power ever. You guys may try to revise science, but math is harder to argue.

Nick said...

Bottom line:

Those who actually DESERVE $8/hr. should be the ones who receive it. Besides, an increase in minimum wage will increase the costs of goods. It's like the old saying that corporations don't pay taxes. They don't because those taxes are passed on to the consumer.

The same is true with wages. Corporations are not going to from X amount of profit to X minus 12 million. The consumers will pick up the tab, the same working consumers who are stuggling now.

Ian McGibboney said...

Nick, if the standard of living is rising to $8 an hour (and it looks more and more like it is), then the least wages can do is keep up. Prices are shooting through the roof as it is, and the current wage (which hasn't changed in nearly a decade, a record) is at rock-bottom in terms of spending power.

I'm not worried that a wage increase like this one will result in the rise of consumer prices. Prices can change for nearly infinite reasons, such as (cough) war. Bit even if a wage increase does drive up costs, then every tax bracket should have to absorb the costs, from CEOS on down. There's no reason that the bottom bracket of earners should bear that burden alone.

Cajun Tiger said...

I'll try and refind the link...sorry I didn't post it the first was on the Treasury site somewhere. prices for goods are already going up, so let's just raise them more...yeah that will really help! not only are we going to increase wages we are going to raise taxes as well. Why not add more corporate regulations as well and really tank the economy.

Never cease to be amazed!!!

Ian McGibboney said...

This is increasingly becoming an exercise in fallacies.

You seem to be coming from a place where increased fuel costs, deregulated corporate standards, endless war and a regressive tax burden are somehow GOOD for the economy. And what could destroy all that prosperity? An incremental raise in the smallest wage ever earned (inflation-wise) in 80 years! An increase that would supposedly drive up the low prices that we've all come to enjoy.

I'd fight this straw man, but I'm losing my grip on your slippery slope.