Hawaii Sens. Daniel Inouye and Daniel Akaka opposed a so-called ‘trifecta bill’ that would have raised the minimum wage but also cut the estate tax and offered other tax breaks. The narrow 56-42 senate vote yesterday effectively killed the measure after weeks of heated debate. Inouye said he wanted to provide working families a livin wage, but the bill was “holding the poor and middle class as hostages” in an attempt to aid the rich. “I found it disingenuous to attach the minimum wage increase $2.10 over three years using it as a carrot to aid the wealthiest in our land,” Inouye said. He acknowledged that the estate tax affects many family businesses and estates in Hawaii, but noted that tax relief granted in 2001 won’t expire until 2010, allowing time for further debate. Inouye said that given the cost of the Iraq war and the need for more education, health care and affordable housing programs, “I could not in good conscience agree to an estate tax cut for the very wealthy at a cost of about $267 billion.”
There hasn’t been an increase in the minimum wage for nearly a decade, and while Democrats had long pushed for one, Republicans effectively blocked those efforts. Recent political pressures, however, made a minimum wage bill inevitable, so Republicans attached their own long-sought estate tax cut to it. Other tax breaks aimed at specific regional industries were also thrown in to bolster the measure’s chances, hence the claim that it addressed a “trifecta” of issues that the Senate could support.
However, in addition to the expected partisan objections to both the minimum wage and estate tax provisions, additional questions were raised as to how the bill would have affected workers that earn tips. Interpretations of the bill varied widely, and some critics claimed that employees could suddenly find themselves earning only $2.13 an hour, plus tips, in states that don’t allow “tip credits” for employers.