Naked City

The Statesman Gets It

Extremely alert readers of the April 4 Austin American-Statesman (those who hadn't already fallen into a trance in the middle of the Metro section) may have noticed a strenuous ad on the final page (D8) of the Business section, headlined "Why in the World is the Death Tax still alive?" (emphasis emphatically in the original). The ad is a brief series of vaguely sourced, categorically negative assertions about the federal estate tax -- "Americans say it's bad, Communities say it's bad, Experts say it's bad …" -- accompanied by an exhortation to call your congressman to get the tax repealed: "America gets it. You get it. Help Congress get it." The ad's content is not remarkable in itself -- it's the conventional bilge of the anti-taxers -- but the sponsor's note at the bottom reads, "Austin American-Statesman." It's not every day that the local paper of record lends its mighty rhetorical arm to a cause so noble as this one, i.e., putting a stop to "a leading cause of why family farms and businesses go under."

Except it's not, of course. As an April 8 New York Times article (duly excerpted in the same day's Statesman) points out, almost no working farmers end up owing any estate taxes, and neither academic researchers nor even the American Farm Bureau Federation (which opposes the tax) could discover "a single example of a farm lost because of estate taxes." As for family businesses -- only the richest 2% of taxpayers (about 50,000 people) pay any estate taxes at all, and "nearly half the estate tax is paid by the 3,000 or so people each year who leave taxable estates of more than $5 million." Hardly a tragic landslide of mom-and-pop entrepreneurs. Should the tax be repealed or radically reduced (the top rate is 55%, but readily available shelters make the average rate actually paid about 25%), the chief beneficiaries would be "the heirs of people who made their fortunes through their businesses and investments in securities and real estate."

Or the heirs of heirs -- e.g., those of Anne Cox Chambers and Barbara Cox Anthony, owners of Cox Enterprises (18 dailies including the Statesman, 30 weeklies and various related businesses), and currently listed together (with several others) at 18th place in the Forbes 400, with assets estimated at $10 billion. Anne is 80 and Barbara a comparatively spry 77, so whoever's on their short list would obviously prefer that the estate tax disappear soonest -- although the awesome scythe of the Death Tax clearly didn't put much of a crimp in the sisters' original inheritance.

Glib word on the street was that the sisters themselves directed the Cox papers to run the Death Tax ad (offered to all surfers at www.deathtax.com), but Jay Smith, president of Cox Newspapers in Atlanta, told the Chronicle that he made the ad available to the chain when it was offered by the Newspaper Association of America. "I know it's run in the Statesman and some other Cox papers, and I hope it runs in all of them," said Smith. Asked if he could document the ad's assertions (e.g., the supposed impact on family farms), Smith said, "I'm not going to vouch for all the individual statistics, but I accept the general premise that the tax is onerous, especially unfair to family-owned businesses, and I hope that Congress will see fit to grant relief." (Too bad -- we were hoping he could help establish the scholarly bona fides of something called the "Family Enterprise Center of Kennesaw State College," cited as an authoritative source in the ad.)

Statesman publisher Michael Laosa says that he and his advertising director made the decision for the Austin paper, and he echoed Smith's judgment of the content, adding that the paper's Sunday story on the subject hadn't changed his mind. Perhaps Laosa was armed against apostasy by a Feb. 4 commentary on the Bush tax plan by editor Rich Oppel, who mused, "The wealthy do benefit most [from eliminating the estate tax]. Yet inflation has driven the impact down into middle-class families. If you're older than 45 and both you and your spouse work, consider your home equity plus 401(k) balance. Estates approaching $1 million are increasingly common today."

Then in Wednesday's lead editorial -- at grandiloquent length -- the Statesman made much the same argument, while coming clean a bit: "Admittedly, family-owned businesses, including Cox Enterprises Inc. … have a self-interest in this matter." Really. Otherwise, it's much more of the same, although we liked the wishful thinking that if the tax is abolished, billionaires like the Cox sisters might give more money to charity before they die, and the Solidarity Forever argument: Eliminating the tax is a populist stand against those greedy Wall Street tycoons. Sheesh.

Even Milton Friedman would be hard-pressed to call millionaires "middle-class." But at the Statesman, we're all Two-Percenters. Get it? Got it.

  • More of the Story

  • Naked City

    Hyde Park lawsuit sutra, Glen Maxey's retirement dilemma, parking lot battle in Judges' Hill neighborhood, Sixth Street recycling, and the anti-growth blues

    Naked City

    Negotiations continue on a bill that would create a special taxing district for land owned by Gary Bradley southwest of Austin; environmentalists and others who oppose such a district cry foul.
  • Naked City

    Real legislative reform of the state's tax-credit allocation process is slowly moving toward the governor's desk.

    Naked City

    For the first time, council members will have to say how much a proposal costs before they put it on the council agenda; and changes to the city's billboard ordinance draw debate, but the council postpones a decision.

    Naked City

    Sugar Land Congressman Tom DeLay takes on the Democrats' redistricting plan.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for almost 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

Support the Chronicle  

READ MORE
More by Michael King
Review: <i>You'll Never Believe What Happened to Lacey</i>
Review: You'll Never Believe What Happened to Lacey
UT could learn a lot from these "crazy stories about racism"

April 13, 2021

SXSW Film Review: <i>Who We Are: A Chronicle of Racism in America</i>
SXSW Film Review: Who We Are: A Chronicle of Racism in America
Jeffery Robinson's captivating lecture on America's shared legacy

March 24, 2021

KEYWORDS FOR THIS STORY

Austin American-Statesman, Anne Cox Chambers, Barbara Cox Anthony, Jay Smith, Cox Enterprises, estate tax, death tax, Michael Laosa, Rich Oppel

MORE IN THE ARCHIVES
NEWSLETTERS
One click gets you all the newsletters listed below

Breaking news, arts coverage, and daily events

Can't keep up with happenings around town? We can help.

Austin's queerest news and events

New recipes and food news delivered Mondays

Eric Goodman's Austin FC column, other soccer news

Information is power. Support the free press, so we can support Austin.   Support the Chronicle