admirably disagreeing

Last night the House voted to seriously scale back the estate tax (http://www.washingtonpost.com/wp-dyn/content/article/2006/07/28/AR2006072800337_2.html). A qualified good. They also voted to raise the minimum wage by a couple bucks, gradually, over a few years. Unqualified bad. I look at the former issue as a principled one. I look at the latter through an economic and, subsequently, a social lense.

Taxing, at death, wealth that someone has built up over a lifetime, be it $10,000 or $10,000,000, is wrong. Some of that wealth has already been taxed, so it amounts to double-taxation. My wife and I live a middle class life, so it's not as if I have a big, direct interest in this. It’s just a matter of principle. People are taxed their entire lives and to tax what they earn, save up and leave to their heirs is just unfair.

The minimum wage is a job killer. It is not explicitly so, hence it's harder to make a direct connection. Will an employee at, say, a fast food restaurant lose their job the day after the hike goes into effect? Most likely not. But small businessmen and managers will take it into account when making future hiring plans. It is Economics 101: raise the costs in one area of a business and either other costs are cut or the higher expenses are passed onto consumers. If the latter is chosen, it will not be for long because it's almost a certainty that not all one's competitors will follow suit. What they will probably do is either hold off on giving raises and/or squeeze more out of the employees they have rather than hire more. Voila! One less job created. One less job, one might note, for younger people who are trying to get their foot in the door and acquire some work experience. Is it any wonder teen unemployment is as high as it is?

This compromise appears to be an example of the perfect not getting in the way of the good. I can respect that. I suppose, however, I’m a perfectionist. I couldn't have voted for it for two reasons. In addition to the aforementioned argument against the minimum wage, it has a ratchet effect. It will never come down. It would be too politically poisonous to come out in favor of abolishing it outright. Congress has done well to do nothing to it in almost 10 years, thereby having the effect of it decrease in real value. Also, I can't imagine myself as a bureaucrat who knows where the line should be drawn between who gets to pass their wealth on tax free, who has to pay 15% and who has to fork over 30%. That is discriminatory to me.

What GOP leaders did by packaging the two issues was, I must admit, a deft bit of legislative maneuvering. Raising the minimum wage is reminiscent of passing a prescription drug bill. They can say they voted to raise it thereby blunting it as an issue in the fall elections, where a similar raise is on several state ballots. Fortunately, this move will probably come at a lesser cost than the drug bill. Even though I myself wouldn't have voted for it, I admire the move.