The money behind the estate-tax repeal

April 26, 2006

It’s sometimes easy to believe there are a handful of powerful, wealthy interests who work, outside the spotlight, to ensure Congress represents their greedy interests. It’s even easier to believe when it’s true.

As the Senate nears a planned vote on abolishing the [tag]estate tax[/tag], a leading government-watchdog group yesterday released a report cataloging the efforts of 18 business-dynasty families to bankroll lobbying campaigns against the tax.

Lobbying against the estate tax has grown into a cottage industry since the late 1990s, fueled by conservative groups opposed on ideological grounds and business magnates seeking the freedom to pass on assets to future generations. Foes successfully tagged the levy “the [tag]death tax[/tag]” and played up its effect on family farms and small-business owners, winning passage of a phased estate-tax repeal as part of 2001’s tax-cut package.

Yesterday’s report, compiled by [tag]Public Citizen[/tag] and United for a Fair Economy, lists 18 families that have made traceable contributions to the network of lobbying coalitions and advocacy groups at the forefront of the anti-estate-tax movement.

Among those singled out are the [tag]Waltons[/tag], who own a large stake of Wal-Mart; the [tag]Wegmans[/tag], whose self-titled supermarket chain has several branches in the Washington area; the Nordstrom department-store heirs; and Frank Blethen, the Seattle Times owner who donated ad space to the Family Business Estate Tax Coalition’s (FBETC) campaign against the tax.

“The families hid behind trade associations and lobbyists to make their pitch … essentially buying what they wanted in Washington since 1998,” Public Citizen President Joan Claybrook said at the report’s unveiling.

Reading the report, that doesn’t seem over-stated at all.

Public Citizen found that these 18 families, worth a total of $185.5 billion, have effectively led a decade-long effort to repeal the estate tax, which would “collectively net them a windfall of $71.6 billion.” They also tried to keep all their efforts under wraps, so you wouldn’t know about it.

These families have sought to keep their activities [tag]anonymous[/tag] by using associations to represent them and by forming a massive coalition of business and trade associations dedicated to pushing for estate tax repeal. The report details the groups they have hidden behind – the trade associations they have used, the [tag]lobbyists[/tag] they have hired, and the anti-estate tax political action committees, 527s and organizations to which they have donated heavily.

As Michael Froomkin put it, “Sometimes there really is a conspiracy.”

On a related note, Nico added that, even after all this effort, most Americans aren’t sold on the idea of a full repeal.

[A] new poll finds that 57 percent favor reforming or leaving alone the estate tax; only 23 percent back repealing it. And for good reason: Americans are about four times as likely to be hit by lightning>than to have to pay estate taxes on small businesses or farms.

The Senate is expected to vote on a full repeal by the summer.

So, will the Waltons – 5 of whom control colletively $100 billion from their Arkansas compound with its 20-megaton nuclear bomb-proof shelter on-site – up their charitable contributions from their $40 billion windfall?? They are ranked dead-last of all rich charitable givers. When their employees raised a collective $1.5 million (on their poverty wages) for a fund to care for Wal-Mart employees who get sick, have emergencies, etc., the Waltons contributed a whole $6,000 to the fund.

Friends don’t let friends shop at Wal-Mart!

  • I know someone who works for moderate Republican who represents a rural district. He always talks about going home to meet constituents who worry about the estate tax, and he says he gets super annoyed every time. There is absolutely no way it’s going to affect 99% of these people, but they’re all convinced it will. There are two lessons from this.

    First, the conspiracy is a resounding success, which is a bad thing.

    Second, the American dream is alive and well, which is a good thing. Americans are consumed by the idea that maybe, just maybe, one day we might be rich. And I’m thrilled that that’s the case. There aren’t a lot of countries where everyone thinks that way.

    All that said, dumping the estate tax is (and I mean this word very sincerely) criminally bad policy; shame on anyone who votes for it.

  • jhupp, While the American dream is alive and well, you missed number 3.

    Third, Americans (or at least the ones in that Repug’s rural district) don’t understand the estate tax. All they hear is the word ‘tax’ and assume incorrectly that they’re paying it. Maybe I’m cynical, but the majority of Americans are too dumb or uninvolved to try to understand the issue. “Hyuck, we’ll believe whatever you tell us!”

  • No, I agree with you. So does he. He thinks the estate tax is good policy. He’s pissed as hell that all these people think it needs to go away.

  • It’s sometimes easy to believe there are a handful of powerful, wealthy interests who work, outside the spotlight, to ensure Congress represents their greedy interests.

    Well, they sure aren’t moving their hineys for homeless people, and they sure aren’t lunching with the single-mom cab drivers. IBut they’ve got to be listening to somebody.

    the efforts of 18 business-dynasty families to bankroll lobbying campaigns against the tax.

    This is funny. This reminds me of your post the other day about the latest Bush poll– it seems to me that a hell of a lot of these Republicans are surprised when the Republican lobbyists, statesmen and admin officials keep leaving their jobs for prison cells, and when it turns out the pressure on the Whitehouse- its unpopluarity- is so real that Bush ends up letting a lot of his cabinet go, or, generals keep taking the efforts to speak out against Rumsfeld and the way the war has been handled by the administration in the press. But it’s just part-and-parcel of the counter-factual fantasy world these people live in.

    They’re so against the estate tax, 18 mega-rich families convinced them to be against it just to line their own pockets, and all these suckers never realized it.

  • This is your “democracy,” folks.

    Your vote is weighted by your wealth, particularly the wealth you contribute to the political party in power.

    If you understand this basic principle, that money is power, and you understand the fundamental desires of the old-money wealthy and the new-money corporatists, then not only will nothing our government does really surprise you but you can even predict the future no matter what party is in charge.

    In fact, this is why I believe that the religious right won’t make significant inroads for the present. Power is a zero-sum game–you gaining power means my losing power. The ExxonMobils aren’t about to give up any power to religious nutcases.

  • inherited corporate wealth is far and away the greatest present threat to our american political system.

    for the last twenty-five years, the virtually unlimited amount of money available to individuals with inherited corporate wealth has funded repeated destructive assaults on our public discourse, our judicial system, our presidency, and, i would guess we will learn in time, on our congress.

    consider:

    – the creation of right wing “think” tanks (more aptly intellectual septic tanks) like cato institute, hoover institute, american enterprise institute, who have created and laundered right-wing propaganda into our public discourse

    – the 6 year attack (1992-1996) on pres clinton that lead to his impeachment, only the second in our history, and totally unjustified as a constitutional necessity

    –the creation and grossly misnamed “federalist society” with its silent agenda of recruiting and patiently promoting extreme Right-wing judges for the purpose of at least paralyzing, if not taking over, the federal judicial system

    – the attack on the estate tax documented by “public citizen” and “united for a fair economy” and noted at “think progress” on 4/25.

    inherited corporate wealth has partially succeeded in undermining, our political system, our constitution, and our political leadership during these twenty-five dangerous years.

    if the 200+ years old american government is to survive into the future it must find ways to deal with this powerful and insidious enemy of our democracy.

    the number of individuals who have access to the deep, deep pools of of individual inherited corporate wealth

    is only going to increase in the coming years.

    why?

    because of enormous payments to some large corporation ceo’s and other high corporate officials (i believe the ceo of exxon will take home 400 mill this year in salary and bonuses),

    and.

    to professional athletes.

    for every famous name at present – coors, walton, scaiffe, koch, et al.,

    there will now be hundreds MORE who have the financial means and perhaps the motive to suborn the american constitution and political system.

    certainly,

    it is appropriate to appreciate inherited corporate wealth which serves to benefit society,

    say,

    the getty museum (j. paul getty)

    the ford foundation (guess who)

    the carnegie endowment for peace (old andy’s money)

    the kennedy and roosevelt families for their contributions of human capital

    the bill and melanie gates foundation (for disease eradication?- i work from memory)

    the smithsonian (english money spends well here, too).

    but for every one of these these,

    there is at least one self-serving,

    “i-got-mine-sucker-now-you-get-yours”

    buckaroo with ICW (inherited corporate wealth) and a diminished social conscience

    who is willing to put money, lots of money,

    into one or another silent political scheme

    to benefit himself/herself

    at the expense of hundreds of millions of his/her fellow citizens.

    the appropriate response seems to me to be:

    if you benefit,

    you are not permitted to destroy!

    the “policy” question is, how to work that out.

    one simple solution is that there be no tolerance for the passing on of large sum of money from one generation to another.

    personally,

    i’m for that solution.

    how much money does one, plus one’s children and grand-children, need to live well?

    one hundred million?

    ok.

    you can keep that much.

    one hundred fifty million?

    ok.

    you can keep that much.

    beyond that;

    you must spend the money in your lifetime for public benefit or forfeit it.

    this is rough-draft thinking.

    anybody got other ideas?

    the key point is:

    no matter how remarkably constructed the american constitution and the american political system is,

    it is highly vulnerable to sabotage

    by motivated individuals with control of huge sums of inherited corporate wealth.

  • …and played up its effect on family farms and small-business owners,

    Shouldn’t that read “and lied about its effect on family farms and small-business owners”?

  • If one really wanted to end this debate on estate tax. Start doing offensive commercials like those used for drunk drivers and smoking.

    Use a typical example of the useless offspring of the ultra wealthy. We’ll call her, Paris. Let’s show her pracing around partying and having a grand ole time on the grounds of her mansion. Throwing money around like there’s no tomorrow.

    Show a joe six pack working on a factory floor. Gets his check and goes to his little home. His kid is sick so he takes her to the hospital. But the hospital has long lineups due to the lack of Federal funding.

    “Repealing the estate tax costs the US government $71.6 billion. You’re paying for her party.”
    End of story.

    First of all, it gets it down to a very personal level and secondly, it shows that here is a use for Paris Hilton after all.

  • Gee, so Paris Hilton is “throwing money around.” At least she’s SPENDING it and thereby benefiting its recipients, not hoarding it under her mattress. I wonder which has the greater benefit: Buying expensive goods and services, or contributing to fashionable charities?

  • I see I’ve pissed off a supply sider.

    Maybe you don’t understand the difference between consuming and producing.

    When people work, they are producing capitol, goods and services to be used.

    When people spend they are CONSUMING that very captiol, goods and services.

    If all you do is CONSUME without producing then that’s what biologists call a parasite (in this case mostly of the Hiton Fortune.)

    BTW Expensive goods and services mean diddly squat in the greater scheme of the economy. If expensive things like Rolls Royce were so important then why aren’t they the richest car maker in the world instead of having financial problems? Expensive trinkets are a niche market with no or limited growth (only some many rich folks in the world), end of story.

    Maybe you’ve forgotten your history, but economies designed to benefit the few have a tendency to collapse in very ugly terms. Just ask the French, Chinese and Russian asristocrats about how well that worked out for them?

  • CB, it looks like you are popular enough to have a troll. Unfortunately, she barely provides a challenge…

    Fallenwoman,
    With your statement, you’ve committed yourself to the claim that spending is good for the economy. That said, we can agree that it really does not matter who is spending it as long as the money is doing what its supposed to be doing.

    Now we get to the realm of facts. You’re implying that the superrich who will benefit from the estate tax repeal are guaranteed to spend their money. Do you have a link supporting your claim that Hilton (or any superrich person) is spending all of the money s/he receives? Can you support your claim that Hilton et al do not hoard their money?

    On the other hand there is the government. Whose sole purpose is to spend money for the civic good. In fact, our government spends more money than it brings in so if you think spending the money is what is needed then why not let the government do it? What’s the economic advantage to giving it to the superrich?

    I’m all ears…

  • Lucky for us, Bush has largely managed to replace that pesky Estate Tax (i.e. the Repub “Death Tax”) with the Birth Tax. Now every baby born in the US immediately owes something like $150,000 (and the interest is going up). This is because Bush has added more to the national debt than almost every President prior to him COMBINED. It’s a pain having to pay taxes, but it’s really painful having to pay when you aint got the bucks to begin with.

    Every time I hear those folks complaining about paying too much taxes (never heard anyone complain about the estate tax – I don’t run in those circles) I generously offer to pay their taxes provided they give me their income. I will extend that offer to those folks too outraged to pay the estae tax, give me your estate, and you won’t have to worry about it. I never get any takers, I wonder why. I guess it’s not that much of a problem is it?

  • In conversation, when someone refers to it as “The Death Tax,” I counter with “Oh, you mean the Aristocrat tax?
    Draws a blank every time.
    Then I (patiently and respectfully) explain what it is, who pays it, and why we need it.
    If the Republicanites are going to fool the Rube-publicans (and others with the help of the right wing media and the MSM) with a name change, I will try to counter with a corrected name change.
    I do like the Paris Hilton reference, but I doubt that she would allow the use of her name. Let’s get a skinny blond actress & call her, oh, Maris Milton?

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