Saturday, July 29, 2006

Minimum Value

The headline says, “House approves minimum wage increase”, but that is a blatant distortion of what the GOP controlled House did late last night.  Yes, they did approve a bill that raises the minimum wage to $7.25 over the next three years, but attached to the bill is the elimination of the Estate Tax as well.  Par for the GOP course, throw a few pennies at the poor while you shovel the real revenues out the back door and into the luxury cars of 7,500 American families that have made their fortunes on the backs of working people and likely never paid their fair share.  Good for the Democrats that voted against this bill that only seeks to widen the gap between the uber rich and the rest of us working stiffs.

8 Comments:

Blogger liberal journal man said...

I thought conservatives hated the minimum wage because of the strain it put on businesses, not the strain it put on the likes of Paris Hilton

11:31 AM  
Anonymous david said...

Wasn't there a NJ study a few years back that proved a $1 increase in the minimum wage was actually GOOD for business and the economy?

Reading the obituaries for JK Galbraith had me shaking my head over the "dismal science". Critics kept praising the scholar and scientific writings of Milton Friedman and damning JKG's writing for being political and subjective. Of course, all of Friedman's works were based on the false premise of a "free market".

I'm afraid I don't know how the American Estate Tax works, but isn't the natural way to avoid it is to share the wealth with one's family before one dies? Or is it just natural for millionaires to mistrust spouses and children?

12:14 PM  
Blogger Purple Avenger said...

have made their fortunes on the backs of working people and likely never paid their fair share.

My father invested wisely and worked as an ordinary electrician all his life. We missed having to pay the noxious estate tax by only a few thousand dollars and that only by low balling some appaisals on some properties.

I really don't think you have a clue as to who can get trapped by this tax.

Had we gone over the edge it would have required liquidating real estate to pay because there was virtually no cash in the estate.

Over $200,000 in negotiable securities were wiped out in the Worldcom scandal/collapse and nothing could be done about it because that was happening right at the time he died. It couldn't be sold because the probate judge took 6 months to approve an executor/adminstrator.

That $200,000+ that was wiped out counted towards the estate tax total even though nobody ever saw a penny of it and had no control over it at the time it evaporated.

7:04 PM  
Blogger The (liberal)Girl Next Door said...

Purple Avenger--If your father worked as an electrician all his life he is not likely one of the 7,500 richest people in this country that I was referring to. They are the ones that have the most to gain from this windfall. There are ways to tax "estates" more fairly if that is a legitimate problem, but doing away with it altogether is unfair and will place an overly heavy burden on working people who will have to make up the difference.

Tax restructuring that will create a more fair system is not what this bill is about, this is about giving tax dollars away to the wealthiest among us. I'm all for the former and am appalled by the latter.

7:12 PM  
Anonymous everyman said...

The IRS says "Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2% of all Americans."
You can read all about Estate Taxes at: http://www.irs.treas.gov/businesses/small/article/0,,id=108143,00.html

3:08 AM  
Anonymous david said...

I had no idea "ordinary electricians" made that kind of money.

Of course no one making minimum wage need ever worry about the Estate Tax.

1:44 PM  
Blogger Recogitare said...

It's not the poor who invest in prospective new businesses, it's the rich who put $billions into private equity-funds (for example, Google and Blogger wasn't founded by the "working class", the investment came from rich folk). Estate taxes take away that incentive. We already have a progressive tax system: i.e., the more you earn the more you pay in both relative (%) and absolute ($) terms. Seems pretty fair to me. Second, increased taxation at the higher income brackets, the lower the incentive for the "working class" to move up (see the stagnant economies of France and Germany). Third, we now live in a global economy and the U.S.' ability to compete with the rest of the world will be diminished with higher taxes -- investment $s will go elsewhere, ultimately our GDP will decrease and everybody will be poorer. See this Wikipedia article and Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations (published in 1776) for more information.

6:26 PM  
Anonymous david said...

I had no idea dead people needed incentives to invest, recogitare. I guess they're rolling over their Bonds as well as their bodies in the grave.

The purpose of the Estate Tax is to slow down --though not eliminate-- the establishment of a class of the idle rich. It also creates the incentive to take risks while one is living rather than to hoard it all.

I have relatives in France who seem to adore their "stagnant" economy. And I can see why. Even the working class (I'm not sure why you put them in quotation marks) enjoy a quality of life that would make a middle class American envious.

Face it, recogitare, the myth of the upwardly mobile worker in America is just that: a myth. American society, if it really was the Smithian ideal, should boast no poverty, but American turns out to be a failed state when the health and welfare of its citizenry is examined. I'll take France and Germany over Louisiana and Florida any day.

7:52 PM  

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