The NewStandard ceased publishing on April 27, 2007.

House GOP Ties Min. Wage Hike to Estate Tax Cut

by Jessica Azulay

July 31, 2006 – Having tried numerous other avenues to repeal a tax that affects only America’s wealthiest heirs, the Republican leadership last week tied its long-sought estate-tax cut to the minimum-wage hike hungrily sought by America’s poorest workers.

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The measure, introduced in the US House of Representatives on Friday, was passed on Saturday by 230 lawmakers – 196 Republicans and 34 Democrats.

The Democratic leadership in the Senate vowed to kill the bill when it was their turn to vote on it, likely next week.

"The Senate has rejected fiscally irresponsible estate-tax giveaways before and will reject them again," Senate Minority Leader Harry Reid (D–Nevada) said, according to the Associated Press. "Blackmailing working families will not change that outcome."

The federal minimum wage, at $5.15 per hour, has stagnated for nearly ten years. The bill passed Saturday would gradually hike the lowest wage to $7.25 per hour by 2009.

According to the Center of Budget and Policy Priorities, a progressive think tank, the modest wage raise would directly benefit an estimated 6.6 million people who are currently bringing home less than $7.25 per hour. The average wage increase predicted for those workers is $1,200 per year. The Center also estimated that current minimum-wage workers would see their yearly incomes go up about $4,400 to $15,100 per year, still less than the federal poverty level for a family of three.

Democrats accused the Republican leadership of allowing a vote on the minimum wage only in conjunction with a choice on the estate tax in order to back them into a corner.

The other beneficiaries of the House bill would be the heirs of Americans who have more than $5 million in assets. The estate-tax cut would allow those heirs to keep an estimated $267.5 billion between 2007 and 2016 that would otherwise go to federal coffers, according to Congress’s Joint Committee on Taxation.

Opponents of the estate tax have been trying all year to ease the tax on inheritance. As previously reported by The NewStandard, the House leadership recently attached a massive tax cut for the logging industry onto an estate tax repeal bill in an effort to lure Democrats from timber-rich states to vote for it. The measure passed the House, but failed to gain traction in the Senate.

This time around, with election-year pressure over the stagnation of the minimum wage growing – especially after raising their own salaries – some moderate House Republicans had asked to be allowed a vote on the measure.

Democrats accused the Republican leadership of allowing a vote on the minimum wage only in conjunction with a choice on the estate tax in order to back them into a corner and choose between voting against a popular wage hike or for an unsavory tax cut for the super-wealthy.

But the attachment of the minimum wage to the estate-tax bill did not appear to sway Democrats. Fewer voted for Saturday’s bill than voted for the estate-tax cut when it was attached to the logging-tax cut.

Advocates for workers called on the congressional leadership to allow a "clean vote" on the minimum wage without other amendments.

Advocates for workers called on the congressional leadership to allow a "clean vote" on the minimum wage without other amendments.

"For the past decade, the minimum wage has remained stagnant at $5.15 an hour while prices at the supermarket and the gas pump have steadily increased, utility costs have soared, and politicians in Washington gave themselves eight pay raises," said SEIU Secretary-Treasurer Anna Burger in a press statement.

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The NewStandard ceased publishing on April 27, 2007.


This News Report originally appeared in the July 31, 2006 edition of The NewStandard.
Jessica Azulay is a staff journalist.

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