- The Washington Times - Tuesday, August 1, 2006

Republicans have loaded up the bill to reduce the estate tax with a minimum-wage increase and a host of popular tax breaks that Democrats will find painful to oppose, including help for teachers, miners and college students.

Several provisions target Democrats in tough races and Republicans want to make them instant issues in this year’s elections. For example, the bill has provisions to allow mine operators to write off half their expenditures for safety equipment, and gives them tax credits for some mine-rescue-training programs. Another provision provides a tax deduction to the timber industry.

A Senate Republican aide said the timber and mining tax breaks target two Democrats running for re-election in states where those industries play a major role in the economy — Sens. Maria Cantwell of Washington and Robert C. Byrd of West Virginia, respectively.

“There’s a lot of 30-second ads waiting to happen in this bill,” the aide said.

Senate Majority Whip Mitch McConnell, Kentucky Republican, said that Republicans are in a win-win situation, because if the bill fails, Democrats will have to vote to “kill” a minimum-wage increase and many popular tax breaks.

“It’s all reward,” he said.

“This is the one shot — this is the real thing,” said Senate Majority Leader Bill Frist, noting broad support for reducing the death tax and increasing the minimum wage. The Tennessee Republican said the bill speaks “very directly” to average Americans such as teachers and people paying state sales tax. He said he won’t bring the issues back again, so this is it.

Other provisions in the bill include:

• Tax deductions for teachers who spend their own money to buy school supplies.

• Tax deductions for college expenses.

• Tax credits for research and development expenditures made by companies.

• Tax credits for employers who hire longtime welfare recipients.

• Tax breaks allowing people to deduct their state and local sales tax, as opposed to income tax.

But Democrats are vowing to kill the bill anyway, spending much of yesterday arguing that the death tax relief is a frivolous giveaway to the rich and that the minimum-wage provision isn’t as strong as their version.

“It’s the most cynical, poorly driven piece of legislation,” said Senate Minority Leader Harry Reid, Nevada Democrat, predicting it would fail.

The House approved the bill on a bipartisan vote of 230-180 early Saturday morning.

Republicans crafted the bill not only to prevent Democrats from using the minimum-wage issue against Republicans in tough races, but also to create a new campaign issue to use against Democrats who oppose the popular provisions.

Privately, Republicans are so excited at the prospect of Democrats voting against the measure that some declined to comment on the political hay they plan to make out of it.

The bill would increase the minimum wage from $5.15 per hour to $7.25 per hour over three years. It would lower, but not repeal, what many call the “death tax,” levied on $2 million of an individual’s estate and $4 million of a couple’s. It would also boost the amount of estate exempt from the tax to $5 million and $10 million respectively, by 2015. Estates up to $25 million would be taxed at the capital gains rate, and those of more than $25 million would see their tax rate fall to 30 percent by 2015.

Many of the remaining popular tax breaks in the bill expired last year and are being extended; others, such as the timber provision, are new.

Democrats said after they defeat the bill, they’ll continuing fighting to approve the tax break extensions as well as their own version of a minimum-wage increase. But Mr. Frist said he won’t bring those issues back, so this is their one shot. Mr. Reid said he doesn’t believe that.

Republicans will file a motion today to overrule a Democratic filibuster of the bill. The showdown doesn’t happen until Friday.

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