Minimum wage increase at "working-class" expense

Ghostface Kill@ · #1 07-30-2006, 02:40 AM

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House approves minimum wage increase
GOP couples boost with estate tax cut, but problems foreseen in Senate

WASHINGTON - Republicans muscled the first minimum wage increase in a decade through the House early Saturday after pairing it with a cut in inheritance taxes on multimillion-dollar estates.

Combining the two issues provoked protests from Democrats and was sure to cause problems in the Senate, where the minimum wage initiative was likely to die at the hands of Democrats opposed to the costly estate tax cuts. The Senate is expected to take up the legislation next week.

Still, GOP leaders saw combining the wage and tax issues as their best chance for getting permanent cuts to the estate tax, a top GOP priority fueled by intense lobbying by farmers, small business owners and super-wealthy families such as the Waltons, heirs to the Wal-Mart fortune.

“This is the best shot we’ve got; we’re going to take it,” said House Majority Leader John Boehner, R-Ohio. The unusual packaging also soothed conservatives angry about raising the minimum wage over opposition by GOP business allies.

The House passed the bill 230-180 before leaving for a five-week recess.

Dems in Senate vow to kill bill
Senate Minority Leader Harry Reid, D-Nev., vowed Democrats would kill the hybrid bill, along with its 10-year, $300 billion-plus cost.

“The Senate has rejected fiscally irresponsible estate tax giveaways before and will reject them again,” Reid said. “Blackmailing working families will not change that outcome.”

Republicans countered that Democrats opposed the bill to keep the issue alive for the November elections.

But Republicans also reveled in putting moderate Democrats in the uncomfortable position of voting against both the minimum wage increase and the estate tax cut — and an accompanying bipartisan package of popular tax breaks, including a research and development credit for businesses and deductions for college tuition and state sales taxes.

The GOP package would increase the wage from $5.15 to $7.25 per hour, phased in over the next three years.

Under current law, the estate tax is phased out completely by 2010, but jumps back to 55 percent on estates larger than $1 million in 2011.

The bill passed Saturday would exempt $5 million of an individual’s estate, and $10 million of a couple’s, from estate taxes by 2015. Estates worth up to $25 million would be taxed at capital gains rates, currently 15 percent and scheduled to rise to 20 percent. Tax rates on the remainder of larger estates would fall to 30 percent by 2015.

The maneuver was aimed at defusing the minimum wage increase as a campaign issue for Democrats while using the popularity of the increase to achieve the Republican Party’s longtime goal of permanently cutting estate taxes.

That left Democrats fuming.

“Just think of what it is to have a bill that says to minimum wage workers, ‘We’ll raise your minimum wage but only if we can give an estate tax cut to the 7,500 wealthiest families in America,”’ said Minority Leader Nancy Pelosi, D-Calif.

Besides the 10-year, $268 billion cut to the estate tax, the measure contains $38 billion in other tax cuts that enjoy widespread backing, such as the research-and-development tax credit.

As part of the plan, Congress would also pass a bill shoring up the U.S. pension system. That bill easily passed the House Friday night and seemed more likely to succeed in the Senate than the minimum wage-estate tax plan.

Senate Majority Leader Bill Frist, R-Tenn., was a driving force behind the plan, overruling Finance Committee Chairman Charles Grassley, R-Iowa, who wanted to couple the business tax breaks with the pension overhaul bill.

The No. 2 Democrat in the House, Steny Hoyer of Maryland, said the move by GOP leaders — who actually oppose the minimum wage increase — was a cynical exercise to give political cover to GOP moderates while ensuring the wage increase does not become law.

“They want on the one hand to appear to be doing something and on the other make sure that it doesn’t happen,” Hoyer said.

Republicans countered that it was only fair to business interests opposed to the wage to reward them with estate tax relief and other tax cuts. And they said adding the estate tax was the only way to get their Senate GOP counterparts — who rejected a minimum wage increase just last month — to vote for it.

“The Republicans in the Senate have twice defeated this,” said Steve LaTourette, R-Ohio. “You know what? If the Senate wants the estate tax and the (tax cut) extenders, they’ve to give us the minimum wage. That’s how it’s going to become law.”

Muscling through
LaTourette organized a drive by almost 50 rank-and-file Republican lawmakers to persuade House leaders to schedule the wage measure for debate. Democrats have been hammering away on the minimum wage issue and have public opinion behind them.

It was during the campaign year of 1996 that Congress last voted to increase the minimum wage. A person working 40 hours per week at minimum wage makes $10,700, which is below the poverty line for workers with families.

Inflation has eroded the minimum wage’s buying power to the lowest level in about 50 years. Lawmakers have won cost-of-living wage increases totaling about $35,000 for themselves over the last 10 years.

GOP lawmakers feared being pounded with 30-second campaign ads over the August recess that would tie Congress’ upcoming $3,300 pay increase with Republicans’ refusal to raise the minimum wage.

Well, what we have here is the rich trying to get richer on the working classes hard work. I mean come on, this is absolutely ridiculous. Since they mentioned Wal-Mart (EVIL) in the article, lets use them as an example. Basically, the cashiers, clerks, stock-room workers, and those friendly retired senior greeters are looking at a wage increase of about 2 dollars within the next three years. This will only happen is the Walton family gets to make billions of dollars when they transfer ownership of the company to the next of kin in line to run the beast. I am not suprised that Republicans (many of whom are QUITE wealthy) would try such a tactic. The working-class NEED this increase to be able to deal with the sky-rocketing increase in fuel prices this year and to be able to provide everyday living for their families. The rich "need" this estate tax-break to buy a second or third home, or 11 new cars and whatever else... I am completely disgusted.

-Ghost

short_lil_chick · #2 07-30-2006, 04:27 AM

"working-class NEED this increase to be able to deal with the sky-rocketing increase in fuel prices this year and to be able to provide everyday living for their families."

I agree, but raising the minimum wage is only going to work for a little while because of inflation. I just wish that companies were less worried about making millions of dollars and more worried about taking care of their fellow human beings.

Turk · #3 07-30-2006, 05:07 AM

States can have their own minimum wage laws and many do. Minimum wage laws should be left to the states to decide. The feds should bow out of this area once and for all.

mike · #4 07-30-2006, 06:17 AM

First off, why do people feel they have a right to take money from the rich and give to the poor? If you start out with nothing as most rich in America did (Bill Gates, Jeff Bazos of Amazon, and countless others) and make yourself rich, why shouldn't you be able to pass on EVERY cent to your children?

Personally I am SICK of Americans feeling they are entitled to everything. Why is it the government’s job to take anything from a dead man and distribute it to others when that dead man has family still alive?

So, let me get this straight. I spend 10s of Thousands of my own money building up my internet business. I make $20 million doing so. Then when I die, my children only see part of it because other Americans are entitled to take in income off my success, hard work and determination? BULL!

This is why America will fail in the long run. All super-powers fail and this is one of the reasons America will fail. America has become an entitlement society and hard work gets punished through tax and the greedy.

The rich in America are not evil Republicans who just found money or stole from the poor. They are people that took a chance and became rich. Democrats are just as rich as Republicans and you have not done any research if you believe otherwise. 80 of the biggest donations to the Presidential candidates in 2004 were to John Kerry, not to President Bush.

I am also 100% against a minimum wage increase. Almost NO ONE with skill makes minimum wage and it DESTROYS small business. Do you know anyone that make minimum wage after working at a company for more than a year? Chances are no because minimum wage is an entry level wage. This allows small businesses to hire workers. If you raise the minimum wage you will force small businesses to cut cost and that will most likely mean cutting staff.

Take the simple economics of it. A restaurant owner is just making ends meet. He has a staff of 50 and of those 20 are making minimum wage (dishwashers, bus boys, assistant cooks). That is $5.15 times 20 or $103 an hour or $5,150 for a 50 hour work week. Now let's raise this guys cost to $7.25 and his costs go up to $145 an hour or $7,250. That is a $2,100 increase or an increase of 40%!!!

Restaurants, like most small businesses will get slammed. Let's say this same restaurant can not afford an $8,400 increase a month ($2,100 x 4 weeks) and has to cut staff to make ends meet. A person working 50 hours a week at $7.25 makes $362.50 a week. If he cuts 6 of those then he can cut $2,175 from his costs and stay even.

So, by increasing the minimum wage by $2.10 (which are entry level jobs) you will actually be forcing small businesses to cut costs and in many ways will be cutting staff. In the Restaurant I showed above now 13 workers will have to do the work of 20. It's a nice pay raise but an increase of a lot of work!

Don't take my word for it. Go talk to some small business owners in your area and ask if they are for this increase.

If you are making minimum wage here is my suggestion. Go to school or learn a trade! If you join the military you will get your schooling paid for and can save money.

Again, I am sick of seeing the so called "rich" get hammered because they are rich. They took a risk, worked hard and it is THEIR money. Stop feeling you are entitled to other people’s money and do something about your life! Millions of people take risks by opening restaurants, car dealerships, ice cream stores and will be harmed by a minimum wage increase. Shame on the Republicans for trying to use this minimum wage increase to get more votes in November.

short_lil_chick · #5 07-30-2006, 07:27 AM

We aren't entitled to someone elses money, we have to pay taxes plain and simple. If rich people don't like it get rich in some other country. Yeah if you make $20 million you should have to pay more taxes, you make more. what in the heck are you going to do with all that money anyways. Although I will say we need a better tax system, something more fair, but right now this is waht we have to work with.

"If you are making minimum wage here is my suggestion. Go to school or learn a trade! If you join the military you will get your schooling paid for and can save money. "

Yeah I can see how a single parent working 40+ hours a week just to make ends meet has the time and the money to go to school. Life is expensive and is getting more so everyday it seems. Making $5.15 an hour just isn't cutting it anymore. Not everyone can or should join the military. Not everyone is "military material" or they are just unable to join. And your right business owners do take a risk opening a business, and they should have thought a little more into the future before opening, or even considering opening one. Any smart business owner would have know that the minimum wage couldn't be $5.15 forever, and should have had a plan for the future before starting, and one that they look over frequently as times change for their business. If they didn't well shame on them. They have to adapt to change and this is something they should have planned for.

Ghostface Kill@ · #6 07-30-2006, 07:28 AM

Mike,

Your example above is right, but you fail to touch on the social problems that do not allow millions of Americans to take any risks. These social problems include single mothers, extended familes, substance abuse, and various other social problems that affect our country today. Sure, we could always turn a blind eye and pretend that these people do not exist, but that would be running away from the problem instead of trying to tackle it head-on with programs such as minimum-wage. Turk is also correct when we stated that a number of states have established the minimum-wage higher than the federal mandated level. You know Mike, you have the ability to spend thousands of your own dollars on your internet business and hopefully you do make millions of dollars, but YOU earned it, not your wife or your children, America will not fail because the rich cannot pass their money to their hiers, America will fail because we have become consumed by greed. I am not asking for wealthy estate owners to cut me a personal check, but I do believe that these individuals have a obligation (social-contract, if you will) to pay the government to run programs which help the less fortunate. We all pay taxes and somewhere along the line yours, mine, and everyone elses hard-earned dollars are fed into the goverment machine and spit out in the form of medicare, social security, rehabilitation and countless other constructive social programs.

You know, I want to be rich, but that totally depends on your vision of what it means to be rich. I have a beautiful wife, a home, three vehicles, savings/investments, vacation money, etc.. money isn't everything in this world and numerous studies prove that money doesn't buy happiness.

-Ghost

mike · #7 07-30-2006, 08:05 AM

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We aren't entitled to someone else's money, we have to pay taxes plain and simple. If rich people don't like it get rich in some other country. Yeah if you make $20 million you should have to pay more taxes, you make more.

Show me where it says in the constitution that the rich have to pay a higher tax rate. Yes, you pay more because you earn more, but why should people have to pay 40% when others pay 0%? There are generations of people on welfare. Parents teach their children and their children teach their children. These people live off the social services and pay no tax. The working Americans pay all the tax and now those working Americans will get another tax increase called the minimum wage hike. There are millions of Americans with small businesses and shouldn't have to get a huge cost increase.

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what in the heck are you going to do with all that money anyways.

What is that any business of the governments or anyone else's? Maybe they want to place $20 million into an account so their children can by a home and have security. Maybe they want to blow it in Vegas. Why should anyone care? They earned the money and should spend it as they please.

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Although I will say we need a better tax system, something more fair, but right now this is waht we have to work with.

The flat tax is a better solution. Everyone pays their fair share. Should we start requiring people to state their income when they shop or eat out? If you make $200,000 a year that 12 oz steak at Outback costs $100, but it is $2 if you make $15,000? That's what we do regarding income tax. And guess what, the rich are less inclined to use social services. The people using social services don't pay tax. The rich usually send their kids to private school and fund public school with their tax.

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Yeah I can see how a single parent working 40+ hours a week just to make ends meet has the time and the money to go to school.

It's called personal responsibility. SHE made a choice to have those children. I suggest woman and men only have children if they can afford them. Having a few kids before you are 21 and being stuck in a dead end job should not be someone else's problem. Ever hear the saying, "you made your bed now you have to sleep in it?" Personally, I get sick of people complaining about their lives when they made 5-6 bad decisions in life. If you eat 4 Big macs a day, don't complain when you get fat. When you decide to drop out of high school don't complain because you can't find a high paying job. When you have 2 children before you are 18, don't complain that you don't have time to have fun.

My mom raised me and my brother as a single mom, went to school and got her college degree. We lived poor and she made a better life for us. Hard work and determination never hurt anyone.

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Life is expensive and is getting more so everyday it seems. Making $5.15 an hour just isn't cutting it anymore.

As I said, minimum wage is for entry level jobs. Almost NO Americans earn minimum wage if they have been working at a job for more than a year. Raises happen when people work hard. Now you are giving automatic raises for an entry level job.

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And your right business owners do take a risk opening a business, and they should have thought a little more into the future before opening, or even considering opening one. Any smart business owner would have know that the minimum wage couldn't be $5.15 forever, and should have had a plan for the future before starting, and one that they look over frequently as times change for their business. If they didn't well shame on them. They have to adapt to change and this is something they should have planned for.

Let me get this straight. Business owners should plan for the government to increase their costs by $2,100 a week? That is exactly what this increase is for a small restaurant. I 100% disagree with your statement. Why? Because we live in a free market which means the government should butt out! Wages will increase if the demand asks for it to increase. Why do doctors make so much money? Is there a minimum salary for doctors? No. The free market dictates that if you work hard and go to school, and choose the right profession you can succeed. When the government starts to step in and dictate wage increases the small business looses and in return people get fired. Again, in my example above 7 people will loose there job. Do you think they are happy for this wage increase?

Then what happens when the 20 million illegal immigrants in the US get guest worker permits and jump into the mix. Now businesses will require to pay them this new minimum wage. Don't complain when you start to see all of the prices in the supermarkets and malls increase by 20%.

Also, when you walk into your local restaurant, don't complain when your normal meal goes up 40% because they owner decided to keep the workers, but raise the costs.

mike · #8 07-30-2006, 08:11 AM

Ghost, I would agree with your social obligation if the government was responsible. Did you know that almost 80% of welfare is spent on administration costs? That means the needy get 20% of the money our tax revenues take in.

I have a small story I always tell my friends.

If you give $1,000 to a government manager to fix a local problem, he will spend $500 on a desk, hire a staff of 10, $500 on the first months rent, and $1,000 on researching the problem. Thus he will spend three times the money and get nothing done.

Let charity work on it's own!

The two richest men in the world are giving up 90% of their wealth to spent on charity. Bill Gates and Warren Buffet are giving up their wealth to spend on great causes like AIDS research in Africa. Why did they do this? Because of a free market. These men are going to spend some $70 billion of their own wealth on making the world better. They didn't need the government to tell them to do this. And guess what, more of that money will get to the people and not be wasted on administration costs.

Mike

short_lil_chick · #9 07-30-2006, 09:11 AM

Did I say it was fair? No. I think something fair would be everyone paying a set percentage of their income to taxes, say like 10%. The rich would still be paying more money, but everyone would be paying the same percentage. So as I said before if you are making $20 million you should have to pay mo

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