HR 5970: A Triple Threat to the U.S. Economy

In a recent commentary, William Beach of the Heritage Foundation offers a good critique of expansive legislation the Senate is trying to pass before Congress goes into recess. Dubbed the "losing trifecta," H.R. 5970, the "Estate Tax and Extension of Tax Relief Act of 2006," looks to increase the minimum wage, reduce the death tax, and extend certain types of tax breaks. The bill currently has support from both sides of the aisle, which makes one wonder whether the conservative supporters truly grasp its implications.

While it is easy to understand the economic damage that would be caused by increasing the minimum wage, the other two provisions have left many conservatives mistaking this bill for good legislation. Although lower estate tax rates sounds good in theory, in practice, this bill would simply affirm the idea that individuals should be subject to double income taxation. In this way, supporting a lower death tax would be a huge step backward in the fight to repeal it outright. Conservatives should stick to principle on this issue and not be placated by a simple reduction in a tax that is unfair and immoral.

The third provision of the bill calls for an extension of numerous tax breaks, exemptions, and subsidies for various businesses, organizations, and other entities. This proposal is just as threatening as the first two, yet conservatives in Congress have supported it as well. In doing so, they are unwittingly damaging future efforts at true tax reform by making the tax code even more complicated than it already is.

The Senate is well on its way to earning a "do-nothing" label. Though the passage of a bill like HR 5970 may curtail some of this imminent criticism, the negative effects of the legislation would far outweigh any immediate political benefits. Conservatives should reevaluate their support for this proposal and look to the good of the economy, not the good of their reelection campaigns.