The U.S. Senate will vote on what has been dubbed the “trifecta bill” tommorrow. Most Democrats oppose the bill, including apparently, bellwether Senator from Colorado Ken Salazar.
It includes a minimum wage hike that would make the Colorado ballot issue obsolete, an estate tax cut, and miscellaneous minor tax cuts.The bill includes three provisions:
* a “three-year phased-in boost in the nation’s minimum allowable hourly wage to $7.25 from the current $5.15.” Since the minimum wage ballot issue in Colorado aims for $6.85, this would be largely a moot point if the trifecta bill passes. But the bill’s glimmer on this point has been dulled because it would limit the benefit of state minimum wage laws with regard to tips (which impacts Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington).
* “The estate tax provision would exempt from taxation all estates worth as much as $5 million — or $10 million for a married couple — and apply a 15 percent tax rate to inheritances above that threshold and up to $25 million. For estates exceeding $25 million, the tax rate would be 30 percent.” This tax cut would reduce revenues by about $286 billion over the next decade, and would exclusively benefit wealthy heirs, while probably hurting charitable contributions as well as tax revenues.
In 2006, the estate tax exemption is $2 million or $4 million for a married couple with minimal planning, and the remainder is taxed at a 46% tax rate.
* It also includes a host of minor tax cut extenders and a provision to tax corporate gains from timber at the rates applicable to individual capital gains, even though ordinarily, corporations get no tax breaks for any kind of capital gains. The timber provision is aimed a Washington State’s Democratic Senators and Mark Pryor from Arkansas.
The bill needs 60 votes to avoid a filibuster. The vote is likely to be close.
Cross Posted at Wash Park Prophet.