July 25, 2005 | Commentary on Taxes
Everyone agrees we should do everything we can to help poor Americans earn more. But one of the worst ways for Congress to attempt to do that is, paradoxically, one of the most popular: raising the minimum wage.
There are several reasons why minimum-wage hikes don't achieve all their objectives:
Such workers are no better served by calls to retain the estate tax because this tax directly undermines job creation. The federal estate tax alone is responsible for the loss of 170,000 to 250,000 potential jobs each year, Heritage Foundation economists estimate. This additional employment never appears in the economy because the investments that would have brought higher employment aren't made.
The estate tax also dampens wage growth. Workers are more productive when they have new tools, machines and factories, and increased productivity boosts wages and salaries. And let's face it: The estate tax is un-American. It strikes many people as a clear contradiction to a central promise of American life - that if you work hard, save and live prudently, you will be assured the enjoyment of your economically virtuous life.
Congress can best help low-income workers by leaving the minimum wage alone and permanently repealing the estate tax.William W. Beach is director of the Center for Data Analysis at the Heritage Foundation, a conservative think tank in Washington.
First appeared in the USA Today