By: Joe Strupp
Newspaper execs get lobbying lessons
Publishers meet over federal estate tax issue
Those seeking to repeal the 83-year-old federal estate tax – which has been a thorn in the side of numerous family-owned businesses, including newspapers, for years – got a lesson in Capitol Hill lobbying from several members of Congress May 25. Repeal advocates were coached on how to make their case before the House and Senate in the coming weeks as legislation winds its way through Congress.
The legislators advised participants to educate Congress on the tax’s negative effects and describe how the tax hits their constituents, while dispelling the myth that it’s only a tax on the rich. Keep trying if you fail, the officials say.
“You never win a cause of this nature without a passionate commitment,” says Sen. Slade Gorton (R-Wash.). “You’ve got to focus on a strong, intellectual policy argument. You can’t just say, ‘It’s a good thing for me.'”
Gorton was one of a handful of members of Congress who met with about 40 business owners, lobbyists, newspaper industry officials, and tax analysts during the meeting in Washington, D.C., organized by The Seattle Times publisher Frank Blethen, the Newspaper Association of America (NAA), and the U.S. Chamber of Commerce.
The meeting also included many members of the Family Business Estate Tax Coalition, created about four years ago to push for repeal. The three-hour meeting at the Capitol Hill Club was the first step in the fight to pass a repeal of the estate tax, also known as the death tax.
Two forms of a repeal are being considered during the upcoming budget hearings. The tax, which has been in place since 1916, is levied at a rate of up to 55% on those who inherit businesses. It raises about $23 billion annually, accounting for just over 1% of the federal government’s annual revenue stream.
Among those hardest hit by the tax are family-owned newspapers, many of which have been forced to sell in recent years to avoid passing on the tax burden to heirs. The first repeal bill, co-sponsored by Rep. Jennifer Dunn (R-Wash.) and Rep. John Tanner (D-Tenn.), would phase the tax out through an annual decrease of 5 percentage points until its full elimination in 2010. Another proposal, offered by Rep. Christopher Cox (R-Calif.) would repeal the tax immediately. Both are under consideration during the current budget review that is expected to produce a budget bill by July 1.
Strategies to lobby successfully for a repeal suggested by Dunn, Gorton, and other congressional veterans were:
1Combine public pressure with factual data to show Congress that the tax raises little necessary money and hurts many voters. “The first-hand stories you can come up with are important for the members to hear,” Dunn says. “Get the grass-roots support from each member’s district and show them how many jobs can be saved or sustained if the tax is repealed.”
2 Use your newspapers as promotional devices for the tax and pressure their local Congress members to vote for a repeal. “This is the time for editorial and op-eds that you can produce,” Dunn says.
3 Keep calling it a “death tax” and be patient if the repeal does not occur this year or next year. “This is not a place where things move rapidly,” Gorton says.
4 Focus on the timeline of the repeal and the phasing-out approach rather than the dollar amounts involved when lobbying Congress.
5 Stress the positive effect that family-owned businesses have on local communities, citing specific examples of businesses that are threatened in each congressional district.
6 Dispel the myth that the death tax hurts only the rich. “The argument that we have to fight against is that it is a tax cut for the wealthy,” Rep. Steve Largent (R-Okla) says. Largent also urged the lobbyists to realize that Congress has many other tax cuts under consideration, including cuts in the capital gains tax and the marriage tax penalty, and is under the gun to help bail out Medicare and Social Security.
Dunn says more than 200, including 27 Democrats, of the 435 House members have signed on to support her bill. But, she says, more support is needed in case President Clinton vetoes the repeal, which is likely. Gorton says even if Clinton rejects the repeal, having it pass both houses of Congress this year is a good first step toward receiving presidential support in the future. “It is much easier to get a bill through Congress again if you get it through once,” Gorton says.
After listening to the congressional advice, Blethen and the NAA offered up two lobbying tools of their own that they say will be key in the fight to repeal the death tax. The first is a pair of newspaper ads sponsored by The Seattle Times and NAA that are running in the Capitol Hill publications, Roll Call, The Hill, and Congressional Quarterly. The ads, which are directed specifically at Congress, have run twice in each publication, and are expected to run again before the end of June. NAA vice president of public affairs Paul Boyle says newspapers nationwide are also being asked to run the ads in an effort to gain support and grass-roots activism in local communities for a repeal. He says anyone wishing to publish the ads is asked to download them from the death-tax Web site, http://www. deathtax.com. “The more people talk about the issue and pressure Congress, the more hope we have to repeal it,” says Boyle.
The second item released at the meeting was a pair of economic reports recently completed that show the impact the death tax has on family-owned businesses and the economy as a whole. It indicates that the tax has driven down available capital nationwide and driven out small, family-owned businesses, while raising little government revenue compared to other taxes. “We also found that it hurts the environment because land needs to be sold or developed by businesses to offset the cost of the tax,” says Dan Miller, an economist who authored one of the reports.
Blethen says he believed the group has prepared well. “The louder our voices are and the squeakier the wheel is,” says Blethen, whose family has owned the Seattle Times through four generations, “the better our approach will be.”
“The argument that we have to fight against is that it is a tax cut for the wealthy.”
– Rep. Steve Largent (R-Okla.)
?(Editor & Publisher Web Site:http:www.mediainfo.com) [Caption]
?(copyright: Editor & Publisher May 29, 1999) [Caption]