Venting: the minimum wage / estate tax deal

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If there's one thing I don't understand about US legislative practice, and that just seems so plain wrong to me, it's this custom of tacking the most disparate things to each other in one bill, and allowing Parliament (Congress) only to vote for or against the whole thing. Instead of just honestly submitting each proposal to the approval of parliament separately.

Now, here's the Republicans trying to tie the long overdue and clamored-for rise of the minimum wage for the poorest to a tax give-away for millionaires. Blackmail, like Reid says.

And worst of it is - they dont even mean it. They passed a bill they know will never make it through the Senate anyway -- just so that their Congressmen can posture about having voted for a minimum wage increase in the election campaign, all the while safe in the knowledge that their vote was phrased in such a way that it would never run the risk of actually creating such an increase.

Pshaw.

Quote:

House Approves Minimum Wage Increase

July 29, 2006

Republicans muscled the first minimum wage increase in a decade through the House of Representatives [..] after pairing it with a cut in inheritance taxes on multimillion-dollar estates.

Combining the two issues provoked protests from Democrats and was sure to cause problems in the Senate, where the minimum wage initiative was likely to die at the hands of Democrats opposed to the costly estate tax cuts. [..]

Republican leaders saw combining the wage and tax issues as their best chance for getting permanent cuts to the estate tax, a top Republican priority fueled by intense lobbying by farmers, small business owners and super-wealthy families such as the Waltons, heirs to the Wal-Mart fortune.
[..]

Senate Minority Leader Harry Reid vowed Democrats would kill the hybrid bill, along with its 10-year, $300 billion-plus cost.

"The Senate has rejected fiscally irresponsible estate tax giveaways before and will reject them again," Reid said. "Blackmailing working families will not change that outcome." [..]

But Republicans [..] reveled in putting moderate Democrats in the uncomfortable position of voting against both the minimum wage increase and the estate tax cut - and an accompanying bipartisan package of popular tax breaks, including a research and development credit for businesses and deductions for college tuition and state sales taxes.

The Republican package would increase the wage from $5.15 to $7.25 per hour, phased in over the next three years.

Under current law, the estate tax is phased out completely by 2010, but jumps back to 55 percent on estates larger than $1 million in 2011.

The bill passed Saturday would exempt $5 million of an individual's estate, and $10 million of a couple's, from estate taxes by 2015. Estates worth up to $25 million would be taxed at capital gains rates, currently 15 percent and scheduled to rise to 20 percent. Tax rates on the remainder of larger estates would fall to 30 percent by 2015.

The maneuver was aimed at defusing the minimum wage increase as a campaign issue for Democrats while using the popularity of the increase to achieve the Republican Party's longtime goal of permanently cutting estate taxes.

That left Democrats fuming.

"Just think of what it is to have a bill that says to minimum wage workers, 'We'll raise your minimum wage but only if we can give an estate tax cut to the 7,500 wealthiest families in America,"' said Minority Leader Nancy Pelosi, a Democrat.

Quote:

Hikes Wages, Cuts Taxes, Looks Like a Dud

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Whatsis Parliament of which you speak? The ciggarettes? <grin>

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Well I did put "Congress" between brackets (like these)

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Re: Venting: the minimum wage / estate tax deal

nimh wrote:

If there's one thing I don't understand about US legislative practice, and that just seems so plain wrong to me, it's this custom of tacking the most disparate things to each other in one bill, and allowing Parliament (Congress) only to vote for or against the whole thing. Instead of just honestly submitting each proposal to the approval of parliament separately.

Bless you nimh, for saying that. They just love to tack such a rider onto a bill they're trying to kill - just to see if they can't get the opposition to vote against their own bill. That, or tack their crap onto a vital appropriations bill.

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Christ, that is pretty low-down.

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"No to the increase of the minimum wage; no to the extension of cuts in estate taxes."

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Only these slim bag Republicans would try to sneak their pet little Estate Tax bill into the minimum wage bill.

Keep the Estate TAx where it is right now.

Same with min. wage.

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There will be a bunch of old geezers who'll hold off dying until 2010 Smile

Hey - it happened in the 70's when Australia abolished the 'death tax' there Smile

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SierraSong wrote:

There will be a bunch of old geezers who'll hold off dying until 2010

Hey - it happened in the 70's when Australia abolished the 'death tax' there

There may be a difference. Here in the US, the polticians are NOT being truthful. There will NEVER be a repeal of the "reath tax". If "repealed, it will be replaced by a Capital Gains tax at death and States will increase their individual tax rates.

This is all smoke and BS from the republican leadership and igfnorance by the democrats.

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SierraSong and woiyo...

serious question, will either of you be one of the one half on one percent of people leaving a large enough estate to be over the exempt limit?

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Chai Tea wrote:

SierraSong and woiyo...

serious question, will either of you be one of the one half on one percent of people leaving a large enough estate to be over the exempt limit?

Depends on when I die Smile

The current law is that estates of $3.5M or more are taxed at 45%. That will be repealed in 2010, but in 2011 will be reinstated with a 50% tax.

I could conceivably work hard all my life (paying taxes in accordance to what I earn) and then have to fork half of it over at my death (double-taxation).

I'll put off my death (like some Australians did) until the thing is permanently repealed Smile

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Better don't eat any food your children serve you in 2010.

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Thomas wrote:

Better don't eat any food your children serve you in 2010.

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SierraSong wrote:

Chai Tea wrote:
SierraSong and woiyo...

serious question, will either of you be one of the one half on one percent of people leaving a large enough estate to be over the exempt limit?

Depends on when I die

The current law is that estates of $3.5M or more are taxed at 45%. That will be repealed in 2010, but in 2011 will be reinstated with a 50% tax.

I could conceivably work hard all my life (paying taxes in accordance to what I earn) and then have to fork half of it over at my death (double-taxation).

I'll put off my death (like some Australians did) until the thing is permanently repealed

However, if you were to die today and had $3.75M, the 45% tax would only be on the excess over the 3.5M or a taxable amount of 250,000.

Personally, I don't care if my heirs get 3.75M or "only" 3.64M, not worth getting excited over.

Plus, by the time 2011 rolls around, they'll be some time of change, that's the only constant in life.

Do they still have the AB Trust? If so, and you are married, you could shelter, at todays expemption rate $7M of your estate.

God, you would think A2K is just fraught with multimillionaires.

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The exemption for 2006 is 2M, so if I died today with an estate of $3.75M, I'd be taxed on $1.75M at 46%.

A lot of folks were against the "luxury tax" passed in 1990 (later repealed), and I'd guess not all of them owned yachts Smile

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You knew what I meant SS.

It's a tax that effects almost no one, matched with an issue that effects millions.

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I have a question: Are there state estate taxes? They strike me as attractive taxes for states to raise: If you own a corporation and don't like the taxes in your home state, you can close it down and re-incorporate in Delaware or the Bahamas. But if you own a ranch, you can't move it out of state to avoid taxes. Aren't states taking advantage of this by raising estate taxes? I would expect them to.

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Yes there are.

My mother died about 2 years ago, and New Jersey has a tax for estates over 675,0000....it is however, quite a bit lower rate.

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Wow, now thats what I call an evenly divided poll.

Meanwhile, re what happened to the estate tax-cum-minimum wage deal the Republicans had concocted (it went down to its pre-calculated defeat, for now), Noam Scheiber on TNR's The Plank sarcastically comments:

Quote:

It looks like Bill Frist's ingenious plan to come close but ultimately fail to pass an estate tax cut has succeeded beyond all expectations: The GOP came up three votes short of breaking the Democrats' filibuster last night.

What's really great about this is that not only did Frist fail to pass the estate tax cut and the minimum wage increase (the latter of which could become a contentious campaign issue this fall), he also whiffed on a package of about $35 billion in tax cuts that were almost certain to pass a week ago. What happened was that the Senate was working on a big pension bill, to which the tax cuts were attached. The combined bill would likely have glided through the chamber. Then Frist abruptly shifted gears and lumped the $35 billion tax-cut package in with the minimum wage increase and the estate tax cut [instead], dooming all three at once.* Nice work!

*Obviously the Senate can try again on this stuff when it returns from its August recess.

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Venting: the minimum wage / estate tax deal

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