Sunday, October 15, 2006

Why all those newspapers hate the estate tax, love I-920

Out and about today, I was able to squeeze in the last 20 or so minutes of Podcasting Liberally, which covered the cerfuffle this week about a handful of newspapers across the region writing checks to the Initiative 920 campaign (here and here).

Goldy and crew were worried that because all of these papers were in league with the estate tax killer, therefore killing any chance that the anti-920 folks would get fair shake. Their worries were only half baked, as they never got around to wondering why newspapers, all family owned, would hate the estate tax.

Let's get one thing straight, I like the estate tax. A lot. I like what it has to say about our values as a nation and I never want to see the rise of the American aristocracy again.

That said, I also like local, family owned newspapers.

Lets get down to it. The papers writing checks to I-920 aren't the Tacoma News Tribune (owned by the McClatchy) the Seattle PI (owned by Hearst) or the Aberdeen Daily World (owned by Stephens Media), because corporations don't fear the estate tax.

And, over the past half century, family owned papers have disappeared. The estate tax has been a nice neat weapon for large newspaper chains to sweep into a community and buy up a newspaper from heirs who either didn't have it in them to run the paper, or lost too much cash in the transaction to make it worth it.

A great book on this sad history is Richard McCord's "The Chain Gang: One Newspaper Versus the Gannett Empire." While Gannett did tons of other nasty things in their earlier days, the estate tax was a common denominator in a lot of their buy outs. The Blethen family, along with the other publishers that have jumped on the I-920 bandwagon have seen dozens of family, local owned papers go down the chain route.

While I'm not for ending the estate tax, I'm also not for ending local ownership of newspapers. Locally owned papers are under intense pressure to sell out to larger chains, because they are highly profitable businesses. Chains, because they can buy things like paper at cheaper prices, can make the papers even more profitable.

Especially Goldy, who fears the lack of decent coverage of both sides of I-920, can recognize the possible chilling effects of chain ownership of newspapers.

Vote no on I-920, but also support local journalism.


Anonymous said...

What's missing from the estate tax debate, and you just about get to it, Emmett, is the fact that you can pay the tax for pennies on the dollar with the proper planning. AND done properly, the outflow during the person's life time might get favorable tax treatment in the form of business deductions, etc.

Then, you're being a responsible citizen AND can live up to your belief of it being bad.

Emmett said...

In many cases, the decision to sell out to a larger company has been because of poor planning, or that the necessary steps for that planning (relatives to take corporate officerships I think) was just not going to work out.