Dean's big business bias

Terry Jeffrey
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Posted: Jan 07, 2004 12:00 AM

Just as Howard Dean is discovering Jesus in anticipation of the Southern primaries, he also has discovered family farmers in anticipation of the Iowa Caucuses. In fact, the family farmer may be the only species of millionaire Dean professes to like.

At a recent debate in Des Moines, Dean posed as a defender of Iowa's principal landholding caste. "People have a right to be angry with President Bush for all the things he's done to Iowa farmers, helping corporatize American agriculture," said Dean. "He is a president who appears sometimes to care more about the special interests that his political policies help rather than ordinary Americans."

At least until the caucuses are over, family farmers will remain "ordinary Americans" for Dean. But bet on this: Soon, under other names, they will re-enter his demonology. They, too, will become "special interests," working with right-wingers to despoil the land and exploit little people. Today's heroic soybean grower is tomorrow's cutthroat businessman who doesn't buy health insurance for his workers.

To see Dean's two-faced approach to "corporatization" and "family" businesses, look at his two positions on the estate or "death tax." This is the tax that requires a family to pay the government a large percentage of the assessed value of its business if it wants to pass ownership to the next generation.

Dean's first position on the death tax is posted on his Web site. Here he pledges to "repeal" the Bush tax cuts and return "the tax code to the rates that were in effect during the prosperous years of the Clinton-Gore Administration."

That would be a disaster for family farms. Why? Because under Clinton, the top death-tax rate was 55 percent. Each individual was allowed to exclude only $650,000 from the tax. Many farmers were forced to do elaborate estate planning to save their farms. Otherwise, their children would be forced to sell the property -- perhaps "corporatize" it, as Dean would say -- to pay off Uncle Sam. Over time, as property values escalated, it became increasingly difficult for family landholders to hold on.

Far from forcing "corporatization," Bush fought to defend family farms against the death tax. His first tax cut bill phased out the tax, eliminating it in 2010. But, in 2011, under a quirk in congressional budgeting rules, it snaps back to its 2000 level. Last June, the House voted for permanent repeal, but Senate Democrats blocked it.

Dean's second position on the death tax emerged on NBC's "Meet the Press." Host Tim Russert asked, "So you would repeal President Bush's tax cut?" Dean said, "Yes. Except there's a few little things I wouldn't repeal." For example, he said, he would "raise the exemption on the estate tax so that small businesses and farms and so forth could be passed along without taxes."

This was clearly a sop for Iowa, but it also begs a question: Which family-owned enterprises will qualify as the "small businesses and farms" Dean would exempt from the tax, and which ones will not? Would a $1 million bean farm outside Sioux City, Iowa, be exempt, but not a $10 million vineyard outside Napa, Calif.?

What about a $500 million family-owned newspaper?

If the death tax, over time, was sure to kill family-owned farms, it has already almost killed family-owned newspapers. In congressional testimony in 2001, Seattle Times Publisher Frank A. Blethen lamented the destruction the tax has wrought on the news business. "When I started my career, the newspaper industry was dominated by locally owned, independent newspapers that served our democracy with a wide variety of voices and who served their local communities with strong connections and investments," said Blethen. "Today, out of about 1,500 daily newspapers, there are fewer than 300 independents left. During my career, I have watched the death tax kill this wonderful community service and diversity of voices by driving ownership into a handful of large, absentee, public-company conglomerates. Many now controlled by faceless, institutional investors who worry about stock prices and profit margins, rather than local communities, journalism, public services and the First Amendment."

The death tax is a one-way ticket for private property. It drives it away from individuals and families and into the hands of big government and large, publicly traded companies. By opposing repeal of the death tax, Dean puts the interests of big business over family business.