On Friday, the House passed a bill which raises the minimum wage to $7.25 over a period of two years. This would be the first time in nine years that the minimum wage has gone up. It’s a nice gesture, but a little late considering how much the cost of groceries and gas has risen in nine years.
Attached to the minimum wage bill is a proposal to cut the estate tax, a bill which republicans have been trying desperately to pass and which benefits only the richest Americans.
Here’s a very interesting analysis of the bill (from Axcess News):
The minimum wage increase helps some 6.6 million Americans with an average dollar benefit of $1,200. The estate tax cut benefits some of the nation's wealthiest, about 8,200 people, with an average dollar benefit of $1.4 million.
The Center on Budget and Policy Priorities said Friday that the House approach of marrying the minimum wage hike to estate tax cuts juxtaposes policies that are aimed at two groups at opposite ends of the economic spectrum.
The Center argued that the House version of the legislation passed on Friday doesn't give minimum wage earners a benefit from $7.25 per hour level for two years. The citizen's advocacy group also said that the estate tax will only benefit the nation's wealthiest individuals.
The Center stated that, "While these income gains could be critical to the well-being of a low-income family, the dollar amount of the gain pales in comparison to the dollar gains for estates benefiting from the House estate tax proposal. The Tax Policy Center estimates that in 2011 an estate tax with a $10 million per couple exemption ($5 million per individual) and with tax rates of 15 percent and 30 percent - similar to the proposal under consideration in the House - would yield an average tax cut of $1.4 million for the 8,200 beneficiaries, relative to making the 2009 estate-tax parameters permanent. Thus, the average tax benefit for these estates would be more than 1,000 times the average yearly income gain for workers who would benefit from the minimum wage change. Moreover, the benefit of the estate tax reduction would grow with the size of the estate -- for example, the Tax Policy Center analysis shows that the 900 estates worth more than $20 million would receive an average tax cut of $5.6 million in 2011."