Minimum Wage Legislation Passes in House; Tied to Estate Tax Cuts

The US House of Representatives passed legislation early Saturday morning increasing the minimum wage from $5.15 to $7.25 an hour over three years. Restaurant server tips would not be counted toward the minimum wageÑeffectively excluding them from the increases. House Republicans were successful in linking the minimum wage legislation to an estate tax cut prior to its passage. Beginning in 2015, estates under $5 million for an individual and $10 million for a couple would not be taxed; estates over $5 million and up to $25 million would be taxed 15 percent; estates over $25 million would be taxed at a 30 percent rate.

The minimum wage legislation disproportionately affects women, as a majority of minimum wage workers are female. The legislation passed 230 to 180. The minimum wage-estate tax cut legislation must now be passed in the Senate to become federal law. Senate Democrats have said that they will filibuster the minimum wage legislation because of its estate tax cuts provisions, even though the minimum wage has not been increased since 1997. Senate Majority Leader Bill Frist has said he has enough votes to overcome the filibuster, though changes to the legislation might have to be made as a result. If changes are made in the Senate, the amended bill will return to the House for a new vote.

Said Sen. Edward Kennedy about the linkage of a minimum wage increase to an estate tax break, “Republicans are playing politics with the lives of hardworking people…. It’s political blackmail to say the only way that minimum wage workers can get a raise is to give tax giveaways to the wealthiest Americans,” according to the Washington Post.


Washington Post 7/30/06; Reuters 7/31/06; New York Times 7/29/06

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