Before this week, even I did not fully appreciate the lack of character of the Republican Party. Their attempt to pass their bill to slash taxes on the estates of multi-millionaires by attaching it to a long overdue increase in the minimum wage is simply breathtaking in its cyncism.
According to an analysis by the Center for Budget and Policy Priorities, the bill would put an average of $1,200 a year into the hands of 6.6 Million people. In other words, there would be a total economic benefit to the lowest economic classes in this country of just short of $8 Billion a year. The gutting of the estate tax, however, would put $1.4 Million a year into the hands of 8,200 people. That is, the richest of the rich would receive a benefit of just short of $10 Billion a year.
One thing that the CBPP missed is that the radical reduction of the estate tax is that it's the gift that keeps on giving. That is, the change in the minimum wage has to be periodically updated to keep pace with inflation. By way of example, since September 1997, the purchasing power of the minimum wage has deteriorated by 20%. Thus, the increase in the minimum wage is not nearly as much of an increase as it is a clawback to where it once was.
On the other hand, the reduction of the estate tax will always keep up with inflation, since no matter how wealthy the wealthy get, their savings from the changes in the bill will always keep pace.
6 comments:
I chose the "Anonymous" label because I'd prefer to comment with a brown paper bag over my head. I voted for Bush--twice--for two reasons: The Democrats nominated weak candidates, and recent Democratic presidents (Carter and Clinton) seem to surround themselves with weak advisors. That said, the obsession that the Bush Administration and Republicans in Congress have with repealing the transfer taxes is embarrassing. I get that sense that they feel that the tide is turning on them very soon, so they better pull out all stops now to repeal these taxes now. Their conduct makes me want to puke.
"In other words, there would be a total economic benefit to the lowest economic classes in this country of just short of $8 Billion a year. The gutting of the estate tax, however, would put $1.4 Million a year into the hands of 8,200 people. That is, the richest of the rich would receive a benefit of just short of $10 Billion a year."
AND THIS IS WRONG WHY??????
Is Anonymous number 2 serious? He must be. It seems pretty clear why it is wrong to give fewer than 10,000 people almost $10b in tax breaks while at the same time gutting social welfare programs that benefit millions. And cynically tying the tax breaks to an increase in the minimum wage as if to say, "See? We're helping the poor too! Don't look a gift horse in the mouth!"
And with the increase, a worker making the new minimum wage working 40 hours a week for 50 weeks brings in a whopping $14,500 gross.
The second line of the previous comment should read, "He must not be," not, "He must be." Apologies for the typo.
Neither fish nor frog nor combination of both. Although I'm sure our host here would prefer his comments remain free from irrelevant side conversations, I will say that a very brief explanation of my pseudonym can be found here. That said, I would not recommend reading anything else on my blog. It is mostly incoherent crap.
I should say though, that I've only been reading this blog for about a month or so, but it has become one of my favorites. If only there were more frequent posts, I could stop reading TaxProf and come here for all my tax blog needs.
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