Mike the Usurper wrote:

Make no mistake, this isn’t about whether raising the minimum wage is good or bad for the economy. Throw that argument out the window. The Republicans have said, “It’s fine! We’ll raise the minimum wage. It’s not a problem.” What they’re haggling about is unless they get this tax break for the wealthiest 2% of the wealthy, they won’t help the poorest in need.

It’s that simple. It can’t be read any other way. Any attempt to explain it otherwise is false.

Yeah, yeah, I'm a bleeding heart liberal. Given what Hastert and co. are trying to pull with this one, the only people I can think of who would go for this is, well, no one. This is "steal from the moserately poor, to give to the poor, to tax it away from them to give to the rich," or something like that.

And the "but it hurts small business" argument got tossed right out the window. The estate tax doesn't affect them.

The minimum wage debate is really really complicated. Almost as complicated as tax reform in general. I truly believe that the minimum wage is not sufficient to exist on working 40 hours a week and trying to live in most metropolitan areas. Ask any waitress or bartender about trying to make ends meet. And these people generally do really WELL compared to the night watchman, the admin assistant, or the cleaning crew.

But simply raising it is not the answer. It *DOES* hurt small business because those costs immediately hit their bottom lines. For businesses that are providing a lean income to the owner, it only means one thing and that is a pink slip. There is a sizable percentage of businesses that fall into this category. Real estate agents. Plumbers. Electricians. Mechanics. Etc. Even for businesses that are providing a sizable income to the owners, it means less growth or reinvestment at the least, due to the margin pressure that increased wages will cause. It's the old adage personified: business exists to make money, not to be altruistic (thanks Ayn!). While it sucks that people cannot effectively live off of minimum wage, it's not in the interest of business to raise it just because.

The estate tax seems like a reasonable compromise, despite the partisan optics. If you are a sole proprietor of a business, there's two things that this appeals to you about. One, chances are your employees are your children or family members, which you would presumably be grooming to take over the business upon your demise. Not having to give up 50% of the value when you do this is appealing. Also, if you are gradually doing this over time (as opposed to when you kick the bucket), then you are still limited to $10K a year without penalty and $1M lifetime. For plumbers or electricians or that sort of thing, this is a show stopper. Those businesses can easily grow to be worth more than $1M and provide very attractive cash flow. Trying to get the family involved and owning the business would create tax headaches all over the place. This would salve that pain and make it much easier to create sustainable and sane succession planning for small businesses.

People complain about tax breaks on the rich and granted, when a "fiscal conservative" is in office, it appears that these things tend to flower. But there's tons of economic evidence that simply increasing taxes on the rich dampens the economic growth of the nation. That's less money to invest in things that are going to help more people. When you're taxed more, you have to use pre-tax mechanisms more, which are heavily biased towards helping yourself rather than investing in other people. Things like 401ks, IRAs, and Educational Savings Plans, are only helping you. The money goes into mutual funds or stocks or bonds, but that's money that might've gone into angel investments, capital investments for small businesses, or venture capital. THOSE are things that really spur the economy and create growth and prosperity for people who are NOT rich. Unfortunately, the US has erected some rather silly barriers with regard to those activities despite the tax breaks that the Bush administration has offered.

If you really wanted to help people who are chained to the minimum wage, then you need to spend more money on education and training. There will always be a need for menial work. Work that should be given minimal wages or something close to that. I'm thinking of teens summer jobs, or light clerical for the stay at home mom whose kids are in school. For people who are trying to make a living, more training and better educational rigor is the only way to level the playing field. Since the US educational system was out of date when *I* was in school, we have the problems we do now. The minimum wage/tax issue is really a red herring, IMO.

RE: Robert J. Elisberg: Republicans in Congress Confirm Worst Fears About Them