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Death Tax Update

Republicans in the House have passed a bill linking a hike in the minimum wage to a modest reduction in the death tax. The bill would raise the minimum wage to $7.25. I'm not sure how the House GOP will explain this increase in the minimum wage to all the people who lose their jobs as a result of it. Businesses will be cutting jobs to cope with rising costs being forced upon them by big government. Also in this bill, the death tax will be reduced slightly. A number of other expiring tax breaks will also be extended, such as a tax break for research and development, a tax college tuition tax deduction, and a tax deduction for state and local taxes.

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Comments (19)

If you cannot pay someone a... (Below threshold)
Kimyl Oh!:

If you cannot pay someone a decent wage, you shouldn't be in business. I knoq how great profits are, but people come first. If you work 40 hours a week anywhere you should be able to live above the poverty line.

The reason these estate tax poison pills are tacked on is so the GOP congress can say they addressed the issue this fall. Just like flag burning, gay marriage and stem cells, they have failed to act on the will of the people by addressing real problems.

As a advocate of free marke... (Below threshold)
CME:

As a advocate of free market economics, I'm no fan of a minimum wage. Nevertheless, because the case against the MW hasn't been convincingly made to the American public, I think opposing a hike in the MW is likely to hurt Republicans. Getting rid of the death tax at the same time seems like a good idea to me.

Kimyl, your posts never fai... (Below threshold)
engineer:

Kimyl, your posts never fail to display your lack of intelligence. I must say you are consistant in that. When you raise minimum wage, the people who are presently making just above minimum wage will demand a pay increase so that they can continue to make above minimum wage. Then prices go up on goods and services to cover the cost of these increased wages (inflation). Next, the poverty level increases to meet inflation, and the people making the higher minimum wage are still below the poverty level. Of course, in the mean time, the cost of goods produced go up meaning less exports, job cuts and more government outlays to cover the new welfare recipients.

The solution to minimum wage is education, a good work ethic and careful spending of one's resoures.

engineer--I always give a h... (Below threshold)
Jeremy Wien:

engineer--I always give a hard time to conservatives who refuse to engage in reasoned debate and who cite the Bible as their reasoning for every view, so I must, in the interest of integrity and fairness, compliment you on that explanation of your opposition to a minimum wage. That doesn't mean that it's 100% "correct" with no room for argument, but I certainly see the other side more than I did before. Thanks.

Here is a more specific man... (Below threshold)
Acelon:

Here is a more specific manner in which increasing the MW is hurting and not helping. Most companies divide their budget between departments. This department gets 5%, this department 10%, based on their production. Each department head will ALWAYS use the maximum amount of money allowed to fill their staff and procure supplies and equipment. Their responsibility is to make their department as efficient as possible, and they use every possible resource available. Now, if all of a sudden their cost of labor increases by 25%, that significantly decreases their flexibility. Some of the times they save right away by going ahead and cutting the positions, others simply do not open new positions and decrease by attrition. Either way, jobs are either lost, or not created, leaving less people employed. Those that keep their jobs, still have the above inflation effects to worry about and remain below the poverty line. Those without jobs obviously remain below the line. A good comparison here would be to look a the last several times that the MW was hiked, and to see what effects were had upon the economy. If it had bad effects then, why do we try to believe it will be different this time?

As a business owner who onl... (Below threshold)
Robin:

As a business owner who only pays minimum wage to part-time high school students, I would remind minimum wage increase proponents that minimum wage is actually an ENTRY LEVEL WAGE. No one expects teh head of a household to support a family on a minimum wage. Engineer is absolutely correct when he says that an increase in minimum wage drives up other costs to an employer - unemployment insurance, workers' comp insurance, etc. all are based on payroll costs. Drive up the cost of minimum wage and you are driving up the costs of having employees which means you cut out a job or two. Shame for those trying to build a resume for a great wage in the future.

I would also point out that the "living wage" debate is pretty awful as well. Ironically, where this is being proposed is in some of the most liberal areas where high property taxes means that most families can't live in the area on a "living wage" anyway.

Kimyl Oh, when you have paid employment taxes for a while, I will find your arguments less disingenuous. The irony is that proponents of a minimum wage increase are never those that have actually had employees. You pay people well for their ability/knowledge, their work ethic and to earn and keep their loyalty. Profits are essential to maintaining a comfort zone that allows you to entice these valuable people and keep them happily working for you.

Would someone on the left t... (Below threshold)
Steve_in_Corona:

Would someone on the left tell us why the feds should not raise the minimum wage to 12 bucks an hour (like Santa Monica for those who do not provide health insurance).

With the purely emotional reasons given for raising the minimum wage, I just can't see why a lousy 2 bucks more under this bill does any significant good.

The article said the average annual gain would be 1200 per worker. That is about 3 dollars a day for the year. THREE DOLLARS A DAY! (Remember when we were told how small the taxcuts were for the middle class - buying a muffler etc.)

How does an extra 3 bucks a day help anyone outside of the Sudan or some 3rd world nation? You can make more than 3 bucks a day panhandling!

In fact, I am not sure 12 bucks a hour is really feasible either. I know my family of three could not survive on 12 bucks a hour - so how can a family of four, or the even larger families of many minority groups who often are earning minimum wage.

Like Kimyl said - make an employer pay a "decent" wage or shut the place down. And frankly, 7.25 sure isn't decent.

I think 20 bucks a hour is decent. I think the federal government should shutdown every restaurant, hotel, tourist park, retailer, and any other business out there that is too cheap to pay its employees a "decent" wage.

Thank you Kimyl. I have seen the light.

Supporters of a higher mini... (Below threshold)
fritz:

Supporters of a higher minimum wage are making two assumptions.

1) A worker making such a wage is probably too passive or too uninformed to grasp that, if he is any good at all, he does not have to stay with an employer who can't or won't ever give him a pay increase. Supporters of this view view tend to have an extremely static view of the American economy, unwilling to admit just how much marketability a good worker actually has--and how likely this worker is to know this--and dismissing those who don't share these static views as naive.

2) An employer paying such a wage for anything beyond a few months to a good worker runs no risk of losing this good employee, or if he does lose him, this worker is easily replaced with one equally as good. Supporters of this view not only are presuming that there is a tremendous glut of first rate workers at the bottom end of the employment ladder but also that employees of such workers are inevitably exploitive. Those who don't share these views, are again, dismissed as naive.

A failure to understand the dynamic and fluid nature of the American labor market and a failure to grasp the symbiotic nature of the relationship between employer and worker are two reasons the minimum wage remains popular. In fact, the worst is being presumed both of the worker (stupid) and the employer (greedy).

fritz, you make good commen... (Below threshold)
Steve_in_Corona:

fritz, you make good comments there. I think one point you do not mention is the belief from the left that the poor are all victims. It isn't that they are 'stupid' per se, it is just that they are incapable of living life without the aid of the rich white liberals in Congress.

The victim mentality MUST be preserved for the left to continue to have any power in this country - and that is why the minimum wage is such a pet issue for the left.

You show clearly why their assumptions about the typical minimum wage earner are so far off, and why they never assume any of the negatives of personal responsibility as to why this individual is "forced" to take a minimum wage job in the first place.

48% of minimum wage earners... (Below threshold)
Kimyl Oh!:

48% of minimum wage earners are heads of households, so regardless of your puritanical capitalist ideals about "skilled workers" and "climbing the ladder," it makes sense to set up a floor for earnings to stave off extreme poverty, and keep these families from giving up entirely.

The Republican dream: get off of welfare and work you lazy ass and by the way, we won't even pay you enough to live decently when you do that.

Not everyone believes in this American dream, probably because many have never seen it, so why would you expect them to bust their ass to get ahead when there is no ahead to get to?

Kimyl,What is a 'd... (Below threshold)
Steve_in_Corona:

Kimyl,

What is a 'decent' wage (your term) that should be established as the minimum wage nationwide.

A dollar amount, please.

kim, where did you get that... (Below threshold)
ke_future:

kim, where did you get that statistic of 48%? and what are the demographics of it? i've seen reports that ~90% of minimum wage earners in non-agricultural jobs are under the age of 20, mostly still in school. and the reamining 10% are at the MW for

i've been trying to find a link to the article i read on this. has anyone else seen it?

Kimyl: "The Republican drea... (Below threshold)
engineer:

Kimyl: "The Republican dream: get off of welfare and work you lazy ass and by the way, we won't even pay you enough to live decently when you do that."

Wow! I didn't know that the Republicans paid my wages.


BTW: Isn't it strange how illegal aliens come here, earn less that minimum wage, send money back home and still can make ends meet? Maybe we need a lesson in what poverty really is.

Kimyl,You are also... (Below threshold)
Steve_in_Corona:

Kimyl,

You are also challenged to show a reference to support your 48% head of household claim.

I link to the Department of Labor and Statistics below. A quick summary states that only 2 million workers make the federal minimum. 25% of those workers are between the ages of 16-19. Another 25% are between 20-25.

1.2 million of the 2 million are parttime workers.

187,000 more (out of that 2 million) are over the age of 55.

Also, if you check the charts you will note that the percentage of hourly workers in this country that are only making the minimum wage has fallen steadily under the Bush Administration and is more than half below the percentage during the Clinton years.

So I am curious where you got your research about heads of households on mimimum wage that you cite with such authority...

http://www.bls.gov/cps/minwage2004.htm

<a href="http://www.epionli... (Below threshold)
The EPI (which is funded by... (Below threshold)
kimyl oh!:

The EPI (which is funded by industry and largely opposed to the minimum wage) says that only 15% are single heads of households. The fiscal policy institute has different statistics, though they appear to be tied to labor.

http://www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf

I would say that if you work full time for the minimum wage you should be able to live at the poverty line. Additionally, if you want to talk about Mexican and Mexican-American workers sending money to Mexico, remember that these people often times do not live in adequate housing, they don't own cars, they are not insured, they have limited (i.e. no) access to health care, and they are afraid to speak up for themselves via our legal system even if they have legal working papers because of the anti-immigrant bias in our country.
Of course we can always ask the poor to do more with less, but we cannot begin to ask a business owner to pay a decent wage and cut into profits (possibly, since 100% of those capital expenditures would go back into the local economy to support businesses).

If you want the poverty line to be lowered, go ahead and set out a strong argument for that. The GOP does not even address the issues of the poor because they would seem so uncompassionate. They just ignore them.

Also, the number of people earning the minimum wage has fallen because the wage has stayed the same while people's willingness to work for 5.15 has fallen (because you cannot even get ahead, much less survive on such a wage). Of course fewer people are making 5.15 an hour; if that number stayed flat we would have even greater increases in the number of people who live in poverty.

Minimum wage laws and social welfare programs are why you drive through ghettos with running water, electricity, houses, and people that can at least eat instead of shanty towns with feces in the street, starving diseased children and rampant violence. Take a commute from the suburbs in the third world and you will see the difference.

The EPI (which is funded by... (Below threshold)
kimyl oh!:

The EPI (which is funded by industry and largely opposed to the minimum wage) says that only 15% are single heads of households. The fiscal policy institute has different statistics, though they appear to be tied to labor.

http://www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf

I would say that if you work full time for the minimum wage you should be able to live at the poverty line. Additionally, if you want to talk about Mexican and Mexican-American workers sending money to Mexico, remember that these people often times do not live in adequate housing, they don't own cars, they are not insured, they have limited (i.e. no) access to health care, and they are afraid to speak up for themselves via our legal system even if they have legal working papers because of the anti-immigrant bias in our country.
Of course we can always ask the poor to do more with less, but we cannot begin to ask a business owner to pay a decent wage and cut into profits (possibly, since 100% of those capital expenditures would go back into the local economy to support businesses).

If you want the poverty line to be lowered, go ahead and set out a strong argument for that. The GOP does not even address the issues of the poor because they would seem so uncompassionate. They just ignore them.

Also, the number of people earning the minimum wage has fallen because the wage has stayed the same while people's willingness to work for 5.15 has fallen (because you cannot even get ahead, much less survive on such a wage). Of course fewer people are making 5.15 an hour; if that number stayed flat we would have even greater increases in the number of people who live in poverty.

Kimyl,You refuse t... (Below threshold)
Steve_in_Corona:

Kimyl,

You refuse to tell us what the 'decent' minimum wage should be as mandated by federal law.

A dollar amount...please.

$7.50 seems about right. In... (Below threshold)
Kimyl Oh!:

$7.50 seems about right. In a city where your rent is going to be between 350 and 550, that seems about fair.

Of course, this assumes that a business will give a worker 40 hours a week, instead of 28 hours a week while setting the threshold for benefits at 35 or something like that. At the current minimum wage, 40 hours a week might be enough to survive even in a real city (i.e. higher cost of living), but a lot of people are making nothing to work only 25-30 hours a week, can be fired whenever, have no job security, etc.

On the right, of course your sympathies go out to business owners who have to deal with added costs. For me, my sympathies are with the person who has nothing to give but their labor and just hopes to survive and have a chance to give their children something better. To me, if you are willing to work and sacrifice your whole life, you should be given adequate housing, food, health care and other things essential to survival, especially if the society as a whole is doing very well.




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