With Democrats like these, who needs GOP?

Cutting taxes on the estates of the wealthy, but hesitating on minimum wage

  • Gov. Martin O'Malley talks to a crowd about raising the minimum wage next to Atwater's Naturally Leavened Bread Bakery and Cafe in Catonsville on Thursday afternoon March 20, 2014.
Gov. Martin O'Malley talks to a crowd about raising the… (Staff photo by Lauren Loricchio )
March 27, 2014|Dan Rodricks

If you needed proof of the political class' abiding support of the ruling class over the working class, look no further than the purportedly left-leaning blue state of Maryland, with a Democratic-dominated legislature throwing millions of dollars at the heirs of millionaires while hesitating about raising the wages of some of the poorest people in the state.

With relative haste and limited debate, the state Senate, led by the well-to-do attorney and grandfather who serves as its president, voted 36-10 last week to raise the exemption on the Maryland estate tax, essentially creating a windfall for some of the wealthiest people in one of the wealthiest states in a country with an ever-widening wealth gap.

If Gov. Martin O'Malley signs it into law, the measure would raise the amount of an estate exempt from Maryland's tax from $1 million to nearly $6 million. The new exemption would cost the state more than $100 million in annual revenue by 2019, when it would fully take effect. Over the five-year phase-in, the loss to the state would be an estimated $431 million.

Forbes, magazine to the corporate class, proclaimed: "Maryland To Cut Estate Tax As Blue States Fall In Line."

Here's the lead paragraph: "Maryland is the latest state to make its estate tax less onerous, and it's significant because it's a staunchly Democratic state indicating that easing the pain of the death tax isn't just a Republican issue."

Easing the pain?

Truly, with Democrats like ours, who needs the GOP? Raising the death tax exemption here or anywhere is a victory for Republicans who, in their constant kiss-up to the wealthy, have long called for death to the "death tax."

What's the argument for raising the exemption in Maryland? It's the claim — just a claim — that millionaires are choosing to retire and die in other states rather than stay here, close to their Maryland grandchildren, and surrender a relatively modest percentage of their assets, after the first $1 million, to the state comptroller.

It's a recurring theme that drives a lot of legislation in Annapolis — we have to have slots because other states have slots, we have to give tax credits to corporations because other states give tax credits to corporations, we have to let millionaires keep more of their millions because other states do.

You'd think Maryland was in the throes of complete dysfunction instead of being one of the nation's leaders in public education, higher education, entrepreneurship and wealth.

With a few exceptions, Maryland Democrats seem just as willing to cater to the ruling class — or, indeed, ensure that they are part of it — as the Republicans they claim to surpass in progressive ideas and in empathy for workers. No wonder the party is in constant identity crisis.

Look at the debate over raising the minimum wage.

While both the House of Delegates and the Senate readily embraced raising the estate tax exemption for the wealthy, there's much grimacing and frowning over raising the state's minimum wage from $7.25 to $10.10 by 2016. Mike Miller, the Democratic Senate president who champions the millionaire's tax break, has been a leading grimacer and frowner. In January, his first response to the $10.10 goal was to call it "much too high of a jump."

Of course, we don't know what that was based on, other than Miller's instinct. Too high for whom?

Maybe Miller can't imagine paying the guys who cut the grass at his Calvert County estate that kind of money. But $10.10 an hour for a full-time worker is still only about $21,000 a year. The Senate president makes that much in less than half the 90-day legislative session in Annapolis.

But there are a couple of bright spots.

First, it looks like there will be some kind of increase in the minimum wage, though, if you follow Miller's two-bit handicapping, it won't be as high as $10.10.

And there's this: In the midst of the debate, another senator has decided to take a stand on behalf of a class of workers we don't hear much about — the people who take care of Maryland's disabled.

Thomas Middleton, chairman of the Senate Finance Committee, wants the pay of disability care workers, currently averaging $9.82 an hour — or around $20,000 annually — to remain 35 percent above the minimum wage.

So, if the minimum goes to $10.10 an hour, a raise for disability care workers would cost the state somewhere between an estimated $2.5 million to nearly $4 million in the next fiscal year, and, of course, more in the future.

But, ask yourself what you'd rather see: a raise for people who take care of the disabled or a windfall for the heirs of millionaires?

On this, Democrat O'Malley gave his best blah: "There are so many things we would like to be able to fund at higher and better amounts. But we also have to be fiscally responsible."

Yes, like giving millions to the heirs of millionaires.

drodricks@baltsun.com

Dan Rodricks' column appears each Tuesday, Thursday and Sunday. He is the host of "Midday" on WYPR-FM.

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