Dynasties bankroll death-tax fight

As the Senate nears a planned vote on abolishing the estate tax, 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 death tax” 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 Public Citizen 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 Waltons, who own a large stake of Wal-Mart; the Wegmans, 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.

The FBETC, co-directed by the National Federation of Independent Business (NFIB), has re-energized its own lobbying effort in favor of full repeal, sending its 60-plus member groups to meet senators and holding weekly steering committee meetings. Although a Congressional Budget Office study concluded in July that fewer than 125 family farms would be hit with estate taxes under exemption limits passed in 2001, NFIB legislative-affairs manager Alex Crockett said the tax has hefty associated costs that do not necessarily go to government coffers.

“The opposition is quite often saying nobody’s paying this tax and wealthy families just want to get rid of it,” Crockett said. “Our guys are paying the tax. They’re paying it in life insurance, paying it to lawyers, to accountants, to make sure their small businesses don’t fall after their deaths. It may not go to the government, but they are certainly paying it.”

The Public Citizen report also focuses on the families’ attempts to influence centrist Democrats from rural areas who are considered potential swing votes on estate-tax repeal. Sen. Blanche Lincoln (D-Ark.), for example, received the third highest amount of any lawmaker from the 18 business dynasties and their company PACs. Lincoln introduced a bill that would accelerate phased estate-tax repeal for certain small businesses and farms.

The Senate estate-tax repeal vote is expected sometime next month, as Majority Leader Bill Frist (R-Tenn.) promised during a February speech at the Conservative Political Action Conference. Last week, Frist sent a letter to GOP conference members outlining the Senate’s schedule leading up to the Memorial Day recess and noted the postponement of a repeal vote that had been scheduled for August but was jettisoned after Hurricane Katrina.

“Now is our time. Here is our moment. Let’s end the death tax forever,” Frist wrote.

Sen. Jon Kyl (R-Ariz.) has led negotiations on a compromise repeal plan that would gradually raise the estate-tax exemption levels, but Crockett said the FBETC has not seen a formal compromise and is focusing on securing an outright repeal.

Another watchdog group, fiscal-policy-centered OMB Watch, held a pro-estate-tax briefing with the grassroots lobbying group RESULTS during last week’s congressional recess.