The Libertarian

Vin Suprynowicz
Website: Liberty Book Shop
Minimum wage hikes are bad, since they outlaw the jobs of those -- mostly part-time teen-agers -- currently earning $5.15 per hour.

Fans of this form of government meddling are fond of saying a minimum wage hike would “benefit more than 6 million Americans.” What they mean is that more than 6 million Americans are currently believed to be working for the minimum wage. Many of those 6 million would, indeed, get raises if the government outlaws employment at less than $7.25 per hour. The rest -- no one is sure exactly how may -- would be fired. This happens every time. Either their jobs are eliminated, or mechanized, or they are replaced by workers with more valuable skills.

That said, however, congressional Democrats have long bemoaned the reluctance of Republicans to raise the minimum wage in recent years. A hike in the minimum wage is necessary to keep up with inflation, the Democrats argue.

Long-term inflation, which did not exist in America between 1787 and 1932, is caused by the printing of excess “fiat” dollars -- dollars with no intrinsic value -- under the supervision of the Federal Reserve Board, a private corporation which was granted monopoly control of the nation’s money by the Democrats during the Wilson administration. Inflation was then purposely introduced by Democrat Franklin Roosevelt, who decreed that more dollars would be required to buy each ounce of gold. (The long-term result? The 2006 dollar is now worth about 3 cents, figured in 1932 dollars.)

Funny how these Democrats have to keep scrambling around, fixing problems of their own making.

Last week, the Republican House decided to give Democrats their wish, enacting and sending to the Senate a bill which would hike the federal minimum to $7.25 per hour, in three steps, by 2009.

The bill also included two provisions dear to the hearts of Nevadans -- an extension of special IRS sales tax deduction granted to residents of Nevada and a few other states that collect no state income tax, and a deduction that would allow conventiongoers to deduct expenses for accompanying spouses.

Congresswoman Shelley Berkley, D-Nev., says she voted for the bill specifically because it would extend the provision that allows Nevadans to continue deducting state sales tax on their federal income tax forms.

So, are Democrats now cheering and dancing a Conga line down Constitution Avenue? Just the opposite. Led by Nevada’s Sen. Harry Reid, Senate Democrats on Thursday blocked the measure.

Though there were 56 votes in favor and only 42 opposed (two of them defecting Republicans), proponents failed to muster the 60 votes required to defeat a threatened Democratic filibuster.

That’s right: Americans are now far less likely to receive a minimum wage hike over the next three years -- and Nevadans are far more likely to lose their IRS sales tax deduction. And they can blame the Democrats and Senate Minority Leader Harry Reid. The Republicans tried.

Although Republicans vowed not to let it happen, Sen. Reid said he objected to a provision in the bill that could actually reduce the wages of Nevadans who receive tips.

Nevada and six other states require employers to pay workers at least the actual minimum wage, even if they receive tips. In the other 43 states, workers can be paid as little as $2.13 an hour, so long as employers can show those workers’ tips bring their total hourly earnings to $5.15 or higher.

A provision in the now-defeated bill would have allowed Nevada employers to use this same strategy to reduce hourly wages for those who receive tips, if they wished. If that was really Sen. Reid’s main objection, so be it.

Most other Senate Democrats, however, seem more concerned about the inclusion in this same bill of a modest reduction in the death tax.

The rhetoric there, too, has a familiar ring to it. Increasing the size of estates exempt from the death tax from $3.5 million to $3.75 million, and reducing the tax rate from 46 percent to a still-whopping 40 percent, would “hand billions more to some 8,000 of the nation’s wealthiest families,” the Democratic propaganda organs shrieked, last week.

(If you had $100 and the armed robber decided to leave you with $60 instead of $55, did he just “hand you” five dollars”?)

This is terrible because the death tax is needed (quoting from an actual reader letter received here last week) to “retrieve revenue” from “the wealthy” who “should give a large portion back to society” since “It was society that allowed them to accumulate the wealth.”

Amazing word choices. Did government “loan” these entrepreneurs the money now to be “retrieved”? Taxes are not “given”; they are seized or demanded under threat of imprisonment -- actually limiting the ability of individuals to experience the grace of “giving back” voluntarily. And what kind of twisted and un-American notion of the true role of government or “society” holds that risk-takers who actually create all our wealth are “allowed” to accumulate their holdings, the way a prison warden might “allow” his charges to save up a few nickels to buy a candy bar?

In fact, America’s wealthiest families -- like that of Sen. Edward Kennedy, D-Palm Beach -- pay little or no inheritance tax. The bulk of the fancy Florida and Cape Cod boats, cars and real estate of which Sen. Kennedy (like other rich senators) enjoys the exclusive use are not owned in his name, but are held by multi-generational foundations and trusts. Since these foundations and trusts cannot “die,” Sen. Kennedy’s death is unlikely to trigger any sizeable estate tax.

Rather, the death tax hits farms or small business, usually built up by first-generation entrepreneurs who have little familiarity with the world of high-priced estate planners.

Yet the calculus for the Senate Democrats appears startlingly clear. Faced with the opportunity of enacting a minimum wage hike which they believe will help “the working poor,” but at a price of also enacting some moderate reductions in an estate tax designed to “punish the rich” -- they won’t bite. It’s more important to them to punish the kind of hard-working entrepreneurs who create most of America’s jobs -- seizing loot these politicians can squander on vote-buying pork -- than to increase the minimum wage.