If the Republican party was hoping to put the Democrats between a rock and a hard place, they have certainly succeeded. On Friday, the U.S. Senate will be asked to vote on a bill that would raise the minimum wage while concurrently cutting estate taxes. Although Democrats have for years been fighting for a higher federal minimum wage, reducing taxes for the rich is absolutely not a policy that Democratic Senators wish to approve; ergo the double bind now faced by blue members of the Senate.
To be clear, the estate tax, also called the death tax, affects only individuals who, upon their death, possess more than $1.5 million in assets; a married couple must have more than $3 million, in order for the federal government to tax their estate. Republicans have for some time made attempts to reduce the estate tax, staying true to their party’s preference for cutting taxes of the wealthy rather than of the poor or middle class. Last fall, there was even a campaign to completely repeal the tax.
By tying a cut in the estate tax to a hike in the minimum wage, the Republican party is trying out a bold new strategy to lessen the tax burden of the rich. Republicans figure that Democrats can’t possibly refuse a higher minimum wage, and indeed, the wage hike would be beneficial in many ways. The federal minimum wage, $5.15, has not been raised since 1997, meaning that it has not been adjusted for inflation in almost nine years. It is impossible for an employee with dependents who works 40 hours per week and earns $5.15 per hour to not fall below the federal poverty line. Democrats have introduced a number of proposals aimed at raising the minimum wage, yet all have failed as a result of Republican majorities in the
legislative bodies.
Democrats are now faced with a difficult choice, and the Republican party should be ashamed of its manipulative policy-making. This bill hurts lower and middle class U.S. citizens, no matter the result of the Senate vote. If the bill passes, U.S. tax revenue will decrease, and the burden of funding our nation will fall more heavily on people who already have less wealth. If the bill does not pass, minimum wage workers will have to wait until the next wage hike proposal, which will most likely be defeated by Republicans once again.
The minimum wage/estate tax bill further hurts employees, because the bill stipulates that all states must count tips toward an employee’s wage. At present, many states have ruled that workers must be paid at minimum wage regardless of tips. The federal government’s attempt to alter that policy is yet one more example of how the Bush administration caters to business owners and employers rather than struggling workers.
In October 2005, Senate Democrats were faced with a decision similar to the one that must be made on Friday. Both parties had introduced minimum wage bills, although the Republican version of the bill called for tax breaks for small businesses. Neither passed. Although it would be a tremendous step for the United States to raise its federal minimum wage, we urge Democrats to stay true to the values of their party. Workers deserve fair salaries, but this Republican bill will cause more harm than good.