GOP Ties Minimum Wage Hike to Tax Cuts

AP reports:

WASHINGTON (AP) – Republican leaders are willing to allow the first minimum wage increase in a decade but only if it’s coupled with a cut in future inheritance taxes on multimillion-dollar estates, congressional aides said Friday. A package GOP leaders planned to bring to a vote Friday or Saturday in the House also would renew several popular tax breaks, including a research and development credit for businesses, and deductions for college tuition and state sales taxes, said a spokesman for House Majority Leader John Boehner. The wage would increase from $5.15 to $7.25 per hour, phased in over the next three years, said Kevin Madden, the aide to Boehner, an Ohio Republican. The maneuver is aimed at defusing the wage hike as a campaign issue for Democrats while using its popularity to spur enactment of the Republican Party’s long-sought goal of permanently cutting taxes on millionaires’ estates.

Let’s be clear about two things. First, all this proposal would do as far as the minimum wage would be to restore it to something barely above 1997 levels in real terms (see Dean Baker) and far below the 1968 level. Secondly, these “tax cuts’ are nothing more than tax shifts. Someone at some point will have to pay down all these deferred tax liabilities.

The Democratic response is to call for “an up or down vote” (as much as I hate to quote Bill Frist) on the minimum wage proposal. There is absolutely no excuse for the continued fiscal irresponsibility of this Republican led Federal government – regardless of one’s view on the minimum wage controversy.

Judd of Think Progress objects to what he calls the Poison Pill of this proposal:

Actually, the provision that Rep. McKeon plans on attaching to the minimum wage bill is an ideologically driven proposal to enact Association Health Plans (AHPs). The proposal would “allow selective groups of small business to be exempt from state regulation – reducing their insurance premiums while raising them for those not in AHPs.” Here’s the impact:

More uninsured. “A study by Mercer Consulting found that AHPs would increase the number of uninsured Americans by more than 1 million. ”

Higher costs. “Only about one in five small employers would have lower premiums, while more than four out of five would actually see premiums go up.”

Rep. McKeon and his allies are counting on the fact that progressive members will find the Association Health Plan proposal so repugnant that they won’t vote for the bill raising the minimum wage.

As usual, one needs to read the fine print with proposal from this group of Republicans.

Update: Faiz trumps this Bear with a picture of Paris Hilton and one fine commentary! Darn – that Think Progress crowd is tough to beat.