Senate Democrats continue to stand firm on Paris Hilton tax

We all know that the Democrats have tried for the last six years to pass a minimum wage hike.  In June, Republicans blocked such legislation from even coming up for a vote.  Now, with the possibility of the Democrats taking back the House and Senate becoming more real, the Republicans are reversing course.  But there's a twist.  Republican Senate Majority Leader Bill Frist unveiled a minimum wage bill that also included a repeal of the estate tax on the richest Americans.  There was some worry that if the Democrats opposed such a measure those inside organized labor would flip out.

But after the Democrats stood firm late last night and rejected the bill, AFL-CIO President John Sweeney understood why it needed to be done:

AFL-CIO President John Sweeney said the proposed estate taxreduction, estimated to cost hundreds of billions of dollars,would have led to cuts in health care, food stamps and othergovernment benefits and "end up hurting the very same peoplethat a minimum wage increase is supposed to help."

Republican Senator Charles Grassley admitted that Bill Frist's legislation was pretty stupid:

"The bottom line is that we bet on the wrong horses,'' saidFinance Committee Chairman Charles Grassley, an Iowa Republican.  "Maybe we should've taken a bet that was more likely to payoff.''

But Bill Frist still tried to spin it as a Democratic Party attack on working Americans:

Frist countered that the failed package was "important to millions ofhard working Americans." And he said the "death tax" on inheritedwealth has meant "90 percent of family businesses do not survive thatthird generation" because they cannot afford the taxes or the cost offinding tax shelters.

Because the Democrats only developed a spine very recently, it doesn't surprise me that Bill Frist thinks he can get away with a comment like that.  It is factually inaccurate that the estate tax, or the death tax as he calls it, causes 90% of third-generation family businesses to go under.  Why?  The estate tax only affects the richest 2% of all American households.  Removing the tax would only increase the division between the wealthiest Americans and everyone else.

Let me put it in perspective.  Thirty years ago, the richest 1% owned one-fifth of America's wealth.  Today, the top-1% own one-third.  Eliminating this estate tax is just part of Bill Frist's effort to empower the already powerful.  Illinois Senator Dick Durbin (D) alluded to the same idea immediately after the vote:

"They (Republicans) can get 6.6 million Americans an increase in theirbasic minimum wage as long as we promised that the fattest of cats inAmerica would get a great big bowl of tax cuts," said Sen. RichardDurbin of Illinois, the second-ranking Democrat in the Senate.

I would like to see the Democrats reintroduce their own minimum wage bill once again, which unlike the Frist legislation does not include a tax cut for people like Paris Hilton.