Linda Basch is the president of the National Council for Research on Women, which recently issued Taxes Are a Woman's Issue: Reframing the Debate, by Mimi Abramovitz and Sandra Morgen with the Council (The Feminist Press, April 2006).
House congressional candidates are ready to hit the campaign trail touting their vote in favor of the minimum wage. It’s an appealing political strategy: 66 percent of minimum wage earners are women, the voting block that every candidate wants to sway.
But this long overdue increase in the minimum wage comes at an unacceptably high price to women and families. Strategically positioned in the law is a tax-break package, including a sharp reduction in the estate tax for the extremely wealthy. After blocking an increase in the minimum wage for years, the House is now holding a modest raise for low-wage workers—mostly women—hostage to huge tax breaks for the ultra-rich. Candidates are hoping that women won’t do the math. But, they will be in for a surprise. Women know the harsh facts.
The drastic and permanent reductions in the estate tax will cost $753 billion, including added interest on the national debt, in the first decade it is in effect (2012 to 2021). In the end women and children will foot the bill as vital programs are cut to pay for this giveaway to multimillionaires. Ironically, minimum wages workers, whose earnings would rise from $5.15 an hour to $7.25 over three years under this new law, may see their costs of living go up even more. As funding is cut for health insurance, child care, food assistance, elder care, and after-school programs they rely on, these families will have to scramble to afford basic needs and services.
Women—who are most often the primary caregivers—pick up the slack when government-funded services like child care and health care are cut. And women—who live longer, yet are less likely to have private pensions—rely on Social Security and Medicare benefits more than men.
And women do not benefit from drastic cuts to the estate tax. Only 1 percent of estates currently pay any estate tax at all. And any wealth passed from a husband to a wife (or vice versa) is already exempt. Cuts in the estate tax—coupled with earlier cuts in taxes on capital gains and dividends—shift the tax burden from those who are wealthy to those who work for a living. Stocks, bonds and inherited wealth are not the backbone of most women’s income; wages are. In fact, women-headed households possess about one-third the wealth of other U.S. households. Women of color, especially, are least likely to benefit—for every dollar of wealth owned by the average white family, the average family of color has only 18 cents.
Despite the rhetoric pitching the estate tax cut as a boon to women entrepreneurs, the vast majority of female small business owners do not have to pay the estate tax—as a matter of fact, in the whole country, only 135 family-owned businesses would have owed any estate tax if current law had been in effect in 2000. On the other hand, women business owners suffer when programs are cut. Just weeks before gutting the estate tax, the House voted to cut $11 million from programs that provide loans and training to women and men starting small businesses.
The chasm in benefits between raising the minimum wage and gutting the estate tax is striking. According to the Center on Budget and Policy Priorities , 6.6 million working Americans will gain an average of $1,200 a year from the minimum wage increase. The drastic reductions in the estate tax will benefit only 8,200 people. These individuals with estates worth over $5 million dollars and couples with over $10 million will increase their family fortunes by an average of $1.3 million each—more than 1,000 times the yearly gain for low-wage workers.
In an election year, it is no surprise that candidates try to use a populist issue such as the minimum wage as a campaign bargaining chip. House members rushed to vote before recess so they could talk up their support of the minimum wage at community barbeques and their support of the reduction in the estate tax at cocktail parties.
Now the political gamesmanship shifts to the Senate, where they will deliberate on the same bill. It is an election year and candidates are hoping that women aren’t paying attention. But, they are and they vote. Ultimately, however, playing politics with women’s lives is a dangerous game. Sometimes it’s not just the candidates who might lose, but women and families, too.
