A new report from a trade association representing family-owned businesses fighting against the estate tax says a giant life insurance lobby is a key force pushing against repeal of the estate tax as the tax creates demand for their insurance.
The life insurance industry’s lobbying presence in D.C. is huge – larger than almost any other industry sector. According to the report, life insurers spent $10 million per month on lobbying in the first half of 2010. Only the pharmaceutical, electric utilities and oil and gas sectors, the heaviest of heavy hitters, spent more.
Life insurers spent more on lobbying than even bankers and health insurers, despite the fact that those two industries were facing huge, industry-shaking bills in Congress, the report says.
The estate tax applies to an individual’s wealth upon his or her death. Republicans gradually repealed the tax in the 2001 but that law is set to expire Jan. 1, at which point the rate will jump back up to 55% on estate wealth over $1 million.
Leading the charge for the life insurers is former Oklahoma Gov. Frank Keating, a Republican who fought to repeal the estate tax when in office. Second in command is the wife of Democratic Sen. Byron Dorgan, who is retiring at the end of the current Congress. Dorgan has fought against repeal of the estate tax. His wife, Kim Dorgan, is a key lobbyist for the life insurance industry.
The report highlights the contrast between the public perception of estate tax proponents as fighting to break up wealthy, almost oligarchic families and the reality that a key force behind the tax is an industry for which ten percent of its revenues depend on maintaining the status quo.
One of the most outspoken voices urging a higher estate tax, Warren Buffet, owns six life insurance companies, the report says.
The report was produced by the American Family Business Foundation, an ardent opponent of the estate tax, and written in part by Tim Carney, a senior political columnist at the Washington Examiner.
Ed. note: The story has been corrected to reflect the report was produced by the American Family Business Foundation, not the American Family Business Institute, a sister organization.