-Caveat Lector- an excerpt from: The Founding Fortunes Michael Patrick Allen©1987 All rights reserved. E. P Dutton ISBN 0-525-48484-1 ----- An excellant reference book. Om K ----- CHARITY AND IDEOLOGY In recent years, corporate rich families have begun to influence government policy by providing financial assistance to a number of policy-research institutions or "think tanks." By and large, these organizations advocate policies that are consistent with the political goals and economic interests of the corporate rich. In a few cases, the members of wealthy capitalist families have donated their personal funds to these study groups. Most of the time, however, they have used grants from their family foundations to finance these policy-research institutions. In short, corporate rich families have been able to advance their political and social agenda with funds originally designated for charitable purposes. Because these policy-research institutions are ostensibly concerned with conducting social policy research and propagating the results of this research to the public, they qualif as tax- exempt organizations. As such, they can receive charitable contributions from both individuals and private foundations. As a result, a large number of conservative policy-research institutions have been established over the past few years with the financial support of wealthy capitalist families and their foundations. In his study Who Rules America Now?, G. William Domhoff found that charitable foundations were tan integral part of the policy-planning process both as sources of funds and as program initiators." Indeed, a staff member of one of these family foundations recently asserted that "foundations have been quietly and extraordinarily effective in the propagation of certain ideas." One of the best-known policy-research institutions in the nation is the American Enterprise Institute for Public Policy Research. This organization was founded in 1943 in order to educate government officials and the public at large about the benefits of the free-enterprise system and the problems associated with excessive government regulation and taxation. Over the years, it has published a series of studies advocating the implementation of conservative economic policies. AEI was one of the first policy-research institutions to appoint experts in various fields as resident scholars. In the words of one conservative, "AEI made conservatism intellectually respectable." At least 20 of its resident scholars and associates were later appointed to senior positions in the Reagan administration. By 1984, AEI had a staff of 145 and a budget of over $11 million. Although it depends primarily upon donations from major corporations, this nonprofit institution has received large grants from several foundations controlled by conservative corporate rich families. Over the past decade, for example, AEI has received over $7.3 million from the J. Howard Pew Freedom Trust, a foundation controlled by the descendants of the founder of Sun Company. During that same period, AEI also received over $2.1 million from the Smith Richardson Foundation, a foundation controlled by the descendants of the founder of the Richardson-Vicks Company. Another $2.1 million was received from the Lilly Endowment, the Charles S. Mott Foundation, the John M. Olin Foundation, and the J. M. Foundation. Another influential conservative research institution is the Hoover Institution on War, Revolution, and Peace in Palo Alto, California. Although it is officially affiliated with Stanford University, this policy-research institution has its own staff and its own endowment. Founded in 1919 as an academic research institute, the Hoover Institution first became involved in public policy research about a decade ago. Unlike other policy groups, the Hoover Institution generally refrains from issuing explicit policy recommendations. Instead, it ,provides research facilities and financial support for scores of conservative scholars. In the last few years, they have produced studies on such issues as Social Security reform and the deregulation of the transportation industry. Many of these scholars later had opportunities to put their ideas into practice. At least 40 former fellows of the Hoover Institution have served as advisers to the Reagan administration. By 1984, the institution had a staff of 200 and a budget of over $10 million. Although it has a substantial endowment of its own, the Hoover Institution has also received funds from a number of foundations. Since 1978, it has received $2.4 million from the J. Howard Pew Freedom Trust. During this same period, it has received another $2.4 million from the Sarah Scaife Foundation, a foundation controlled by Richard M. Scaife, whose grandfather was a major stockholder in Gulf Oil and several other major corporations. In addition, the Hoover Institution has received a total of $1.4 million from the Lilly Endowment, Samuel R. Noble Foundation, the J. M. Foundation, the John M. Olin Foundation, and the Smith Richardson Foundation. Since the election of President Reagan in 1980, established conservative policy-research institutions, such as the American Enterprise Institute and the Hoover Institution, have been eclipsed to some extent by institutions advocating even more conservative policies. One of the best-known and most influential of these is the Heritage Foundation. This neoconservative policy- research institution was founded in 1973 with a $250,000 donation from Joseph Coors, a grandson of the founder of Adolph Coors Company. By 1984, the Heritage Foundation had a staff of 110, including 35 resident scholars, and a budget of $10 million. Although it now receives contributions from many wealthy individuals and business corporations, this nonprofit institution still receives large grants from a number of foundations controlled by conservative corporate rich families. The Samuel R. Noble Foundation, for example, has contributed over $3.1 million to the Heritage Foundation since 1978. The Sarah Scaife Foundation has contributed another $2.1 million in the past four years alone. In addition, the J. M. Foundation, the J. Howard Pew Freedom Trust, the John M. Olin Foundation, and the Smith Richardson Foundation have contributed at least $1.8 million to the Heritage Foundation since 1978. The Heritage Foundation is now one of the largest and most influential policy-research institutions in the nation. In 1982, the foundation paid $9 million for an eight-story office building in Washington, D.C., not far from the Capitol Building. The Heritage Foundation has achieved its prominence as a policy-research institution largely through the publication and distribution of countless research reports and recommendations. For example, the Heritage Foundation publishes a quarterly journal, Policy Review, and a monthly report, National Security Record. It also publishes and disseminates extensive reports on particular issues. Perhaps the bestknown publication of the Heritage Foundation was a voluminous tome titled Mandate for Leadership. Policy analysts at the foundation began work on this document in 1979, before President Reagan took office. Free copies of this publication, which outlined a conservative agenda for the Reagan administration, were later delivered directly to officials throughout the legislative and executive branches of government. In 1984 alone, the staff at the Heritage Foundation produced more than 200 books, monographs, and reports. At present, the typical Heritage Foundation report is distributed to about 1,000 elected and appointed government officials. Instead of simply being mailed, these reports are often hand delivered to important officials. Another 6,000 copies of these reports are distributed free of charge to journalists and scholars. Although many of the advisers to the Reagan administration during its first term came from either the American Enterprise Institute or the Hoover Institution, many of the advisers appointed during the second term have come from the Heritage Foundation. By 1984, at least twelve resident scholars from the Heritage Foundation had served as advisers to the Reagan administration. Another influential policy-research institution is the Center for Strategic and International Studies (CSIS) in Washington, D.C. Although it is officially affiliated with Georgetown University, the center maintains a separate staff and facilities. Founded in 1962, CSIS conducts studies of various aspects of foreign policy and national security. Many of these studies appear as articles in Washington Quarterly, a public policy journal published by the center. In addition, the center conducts seminars for both senior corporate officers and senior government administrators. However, one of the main activities of CSIS is the formation of public opinion through news reports and broadcasts. Several former cabinet officers, such as Henry Kissinger, James Schlesinger, and Zbigniew Brzezinski, serve as fellows at the center, even though they are rarely in residence. Whenever a foreign policy development or national security issue becomes news, these experts provide newspaper, radio, and television reporters with interviews. By 1984, CSIS had a staff of 160 and a budget of over $7 million. Although the center receives funds from the major media corporations, it also receives large grants from foundations controlled by conservative corporate rich families. In the past decade, the Sarah Scaife Foundation has contributed over $1.6 million to CSIS. The J. Howard Pew Freedom Foundation, the John M. Olin Foundation, the S. R. Noble Foundation, and the H. Smith Richardson Foundation have contributed at least another $1.1 million. Several other neoconservative policy-research institutions are financed primarily by a few corporate rich families and their foundations. One of the smallest and least-known neoconservative policy groups is the Institute for Contemporary Studies in San Francisco. Two of the directors of this institute eventually became special advisers to President Reagan. Since 1980, this institute has received over $1.1 million from the Sarah Scaife Foundation. It also received relatively small contributions from the Smith Richardson Foundation, the J. Howard Pew Freedom Trust, the J. M. Foundation, the Adolph Coors Foundation, and the John M. Olin Foundation. Another small but influential conservative policy-research institution is the Pacific Legal Foundation, which has brought suit on behalf of a number of conservative causes. It has received over $1.3 million in grants from the Sarah Scaife Foundation and the Lilly Endowment. Other neoconservative policy-research institutions include the Institute for Research on the Economics of Taxation, which does research on the benefits of minimal taxation; the Institute for Foreign Policy Analysis, which issues conservative foreign policy recommendations; the Manhattan Institute, which advocates the reduction or elimination of many welfare programs; and Freedom House, which monitors the suppression of individual liberties in socialist countries. All of these institutions have received large grants from either the Sarah Scaife Foundation or the J. Howard Pew Freedom Trust. Most of these institutions have also received grants from the Samuel R. Noble Foundation, the J. M. Foundation, and the John M. Olin Foundation. The conservative and neoconservative policy-research institutions funded in large part by grants from a few private foundations form a diffuse but coherent social network. Most of these institutions once relied on grants from these foundations for their financial survival. As a result, some of the most influential individuals within this policyformation network are those members of wealthy capitalist families who control the foundations that provide funds to these institutions. Using a combination of personal and foundation funds, these members of the corporate rich have been able to influence the activities of these study groups. One of the most influential individuals within the network of neoconservative policy-research institutions is Richard M. Scaife, chairman of the Sarah Scaife Foundation. This foundation, with assets of $200 million, was founded by his mother, Sarah Mellon Scaife, the daughter of Richard B. Mellon. Since 1973, when Richard Scaife became chairman, the foundation has devoted more and more of its resources to conservative causes. In fact, Cordelia Mellon Scaife, the sister of Richard Scaife, resigned as a trustee because she objected to the fact that the Sarah Scaife Foundation had departed from the original philanthropic goals of its founder. She pointed out that their late mother, Sarah Mellon Scaife, had originally intended the foundation to fund the arts and research on population control. According to one estimate, Richard Scaife has donated a total of $36 million of foundation and personal funds to over twenty different conservative nonprofit organizations. Some of these personal funds have come from the income generated by trusts originally established by his mother for his children. Several foundations, such as the Samuel R. Noble Foundation, established by Oklahoma oilman Lloyd Noble, and the J. M. Foundation, established by New York financier Jeremiah Milbank, fund conservative causes, but they also fund a large number of other charitable activities. However, there are a few foundations at the center of the neoconservative policy-research network that devote most of their funds to conservative organizations and programs. One of these is the J. Howard Pew Freedom Trust. This foundation is controlled through the Glenmede Trust Company, by the grandchildren of Joseph N. Pew. In recent years, this foundation has devoted about half of its annual budget to neoconservative organizations. Similarly, the Smith Richardson Foundation devotes roughly half of its grant funds to neoconservative organizations. The Smith Richardson Foundation is controlled by several of the grandchildren of Lunsford Richardson. Its president is R. Randolph Richardson, a grandson of the founder. Last but certainly not least, there is the John M. Olin Foundation, which devotes almost all of its grant funds to neoconservative organizations. Although one member of the Olin family serves as a trustee of the foundation, the president of the John M. Olin Foundation is William E. Simon, a former cabinet member under Presidents Nixon and Ford. These three foundations often collaborate in their efforts to assist neoconservative organizations and causes. In 198 1, for example, the John M. Olin Foundation joined with the Sarah Scaife Foundation and the Smith Richardson Foundation to establish New Criterion, a neoconservative review of contemporary arts criticism. POWER PLAYS The corporate rich are not reluctant to exercise their political power to their own advantage. For example, members of corporate rich families have occasionally lobbied the Congress and the president to enact special legislation for their benefit. A case in point involves the du Pont family. In 1949, the Justice Department filed an antitrust suit against the members of the du Pont family and their various holding companies on the grounds that their control of both E. I. du Pont de Nemours and Company and General Motors violated the Clayton Antitrust Act. At that point, Pierre S. du Pont, his siblings, and their descendants owned, directly and indirectly, over 26 percent of the stock in Du Pont. In turn, Du Pont owned almost 23 percent of the stock in General Motors. Members of the du Pont family also served as directors of both Du Pont and General Motors. Five years later, the presiding judge dismissed the antitrust complaint. However, the Justice Department appealed the decision to the Supreme Court, which overruled the District Court decision in 1957. After five more years of legal skirmishes, the presiding judge finally entered a final judgment that required Du Pont to divest itself of its General Motors stock by 1965. According to the terms of this decree, Du Pont was required to distribute its General Motors stock to its own stockholders in three installments. Similarly, Christiana Securities, the main holding company of the du Pont family, was required to sell some of this General Motors stock and distribute the rest to its stockholders. The judgment also required several members of the du Pont family, particularly those who were large stockholders in Christiana Securities, to sell a portion of this General Motors stock. The divestiture order raised serious tax problems for the members of the du Pont family. Du Pont was required to distribute General Motors stock then worth approximately $3 billion to its stockholders. Because the members of the du Pont family owned, either directly or indirectly, at least 26 percent of the stock in Du Pont, they were due to receive about $790 million in General Motors stock. Even though this stock was due to be received in three separate installments over a period of four years, this stock distribution would create enormous tax liabilities because the tax laws treated such distributions as income. Specifically, the du Ponts were faced with the prospect of paying as much as $550 million in income taxes on this General Motors stock. Even before the final divestiture order was issued, special bills were introduced in both the House and the Senate to provide Du Pont stockholders, including the du Ponts, with tax relief. In general, these bills required Du Pont stockholders to pay relatively low capital-gains taxes on only a portion of the value of the General Motors stock they received as a result of these distributions. President Kennedy signed the special Du Pont tax-relief bill in 1962. By 1964, however, the du Ponts were seeking additional tax relief. Because General Motors stock had doubled in value since 1962, the tax liabilities of the du Ponts on the last distribution of General Motors stock were also about to double. Yielding to a concerted lobbying effort, the Treasury Department ruled that the final distribution of General Motors stock was a tax-free distribution. In all, the du Ponts probably saved at least $350 million in income taxes as a result of these government actions. On occasion, individual members of the corporate rich have lobbied Congress to pass special legislation for their benefit alone. One of the most blatant political maneuvers of this sort involved H. Ross Perot, the founder of Electronic Data Systems. In 1975, as the House Ways and Means Committee was about to finish its work on a major taxreform bill, one of its members introduced a very unusual amendment. This amendment would permit any taxpayers who had capital losses of more than $30,000 in one year to receive a corresponding refund of any taxes they paid on capital gains during the previous three years. A few weeks earlier, the Senate Finance Committee had included a similar amendment in its version of the tax bill. The main beneficiary of this amendment was H. Ross Perot. In fact, the proposed amendment had been prepared by his lawyer, who was also a former commissioner of the Internal Revenue Service. It seems that Perot had paid roughly $18 million in capital-gains taxes on the sale of $57 million worth of Electronic Data Systems stock in 1971. Three years later, he lost approximately $15 million when a brokerage house that he had financed became bankrupt. This amendment would have entitled him to a tax refund of about $15 million in 1974. H. Ross Perot had some reason to believe that his amendment might pass. Earlier in 1974, he had contributed $90,000 to various congressional candidates, more than any other individual. Moreover, $55,000 of this went to members of the House Ways and Means Committee and the Senate Finance Committee. This amendment was eliminated only after the details of the Perot amendment and his campaign contributions were published in several major newspapers. A more recent and more successful attempt by the members of a corporate rich family to amend the tax laws for their own benefit involves the Gallo family. Ernest and Julio Gallo and their four children are the owners of a large wine company worth roughly $600 million. When the House Ways and Means Committee began considering a tax-reform package in 1985, one of the proposed changes in gift and estate taxes was the imposition of a new "generation-skipping tax." The existing law contained a provision for taxing distributions from generation-skipping trusts, but the proposed law would tax direct gifts and bequests from grandparents to grandchildren as well. However, the proposed law included a $1 million exclusion for each grandparent. Under this law, for example, the Gallo brothers and their wives would have been able to transfer a total of $4 million in company stock to their grandchildren before they had to pay generation-skipping taxes. Ernest and Julio Gallo, who planned to distribute some of their stock in the family company to their twenty grandchildren, wanted a more generous exclusion. An amendment to the proposed generation-skipping tax that would grant an additional $2 million exclusion to each grandparent for each grandchild was introduced. Indeed, a temporary version of the "Gallo Amendment," as it came to be known, was included in the final tax law. The passage of this amendment may have been aided by the fact that Ernest and Julio Gallo and their wives had contributed over $276,000 to various federal campaigns since 1977. In any event, the Gallos now have until 1990 to transfer a total of $84 million worth of stock in the family corporation to their twenty grandchildren without paying any generation- skipping taxes. Sometimes, special legislation is introduced in order to enable the descendants of a wealthy entrepreneur to maintain control of their family corporation. For example, the Pew family sought to change the tax laws in 1971 so they could retain their control over Sun Company. The Tax Reform Act of 1969 was the first attempt by the federal government to regulate the activities of tax-exempt private foundations. One of the key provisions of this legislation was a minimum payout rate that required private foundations to disburse 6 percent of the market value of their assets each year. One of the foundations threatened by this provision was the Pew Memorial Trust, which was endowed and controlled by members of the Pew family. Indeed, the descendants of Joseph N. Pew have been able to retain almost absolute control over Sun Company through their control of the Pew Memorial Trust, which, in turn, owns about 22 percent of Sun Company stock. The problem facing the Pews was the fact that Sun Company stock paid very small dividends. In 1971, a member of the House of Representatives from Pennsylvania, the home of Sun Company, the Pew Memorial Trust, and the Pew family, introduced a bill that would have greatly reduced the minimum payout requirement as it applied to the Pew Memorial Trust. The Treasury Department later recommended passage of a bill that reduced the minimum payout provision from 6 percent to 5 percent of foundation assets and extended the deadline for full compliance from 1975 to 1978. Although both bills eventually failed to gain passage, the Pews did receive some assistance from the Republican administration. It was the least they could expect, because they had contributed over $142,000 to national Republican organizations in 1968. The members of corporate rich families are sometimes able to amend the laws of particular states to suit their own purposes. For example, the Getty family had the laws governing estates and trusts in the state of California changed in order to resolve a lingering family feud. By 1984, the three surviving sons and fifteen grandchildren of J. Paul Getty were the beneficiaries of a trust worth roughly $3 billion. One of the sons, Gordon P. Getty, was the sole trustee of this trust. However, many of the beneficiaries, including his brothers and several of his nieces and nephews, did not approve of his management of the trust. To begin with, many of them felt that he had exposed the trust to unnecessary capital-gains taxes when he agreed to the acquisition of Getty Oil Company by Texaco in 1984. Although the trust received just over $4 billion in cash for its Getty Oil stock, it also incurred state and federal tax liabilities of nearly $1 billion as a result of this sale. During this period, several family members brought suit to have Gordon Getty removed as the trustee of the family trust. After months of litigation, the various descendants of J. Paul Getty finally agreed to split the trust into several smaller trusts, one for each branch of the family. This arrangement would enable the members of each branch of the family to choose the trustees for their trusts. There was one problem with this solution. The laws of the state of California did not contain any explicit provision for dividing a trust into a series of separate trusts. Within a matter of weeks, a bill that allowed the Gettys to resolve their family feud by dividing their trust into separate trusts was passed by the state legislature and signed by the governor. Even though they are major contributors to many political campaigns, it is not easy for the corporate rich to obtain the passage of preferential legislation. Legislative relief in the form of a change in the law requires the cooperation of the members of various congressional committees and the assent of a majority of the members of both the Senate and the House of Representatives. It is difficult to convince a majority of the members of both houses of Congress to vote for a law that benefits only the members of a few wealthy families. They are much more likely to vote for a law that purports to benefit a large segment of the population, even if the bulk of the benefits accrue to the members of corporate rich families. In 1981, for example, President Reagan advocated several changes in both the income tax and the transfer tax that were very beneficial to the corporate rich. In particular, his tax-reform package contained a provision that would eventually reduce the federal transfer tax on gifts and estates from a maximum rate of 70 percent to a maximum rate of 50 percent. In order to gain legislative support for this provision, the proponents of the Economic Recovery Tax Act argued that the small family farm in America was being destroyed because farm families could not afford to pay the transfer taxes incurred whenever a farm passed from one generation of family members to the next. Because the maximum transfer tax rate applied only to gifts and estates in excess of $5 million, however, the family farms that stood to benefit the most from this change in the law were hardly small. Indeed, the main beneficiaries of this reduction in the maximum transfer tax rate were the corporate rich. THE PRIVILEGED CLASS The members of corporate rich families are clearly more powerful and influential than the members of most other families. First and foremost, they are principal stockholders in large corporations. In many cases, family members also serve as officers and directors of these corporations. To the extent that they control major corporations, the members of wealthy capitalist families are able to exercise tremendous economic power. For example, corporations have the power to build new plants and close old ones. In this way, they affect the welfare and even the survival of entire communities. Consequently, government officials, at both the state and local levels, are generally very solicitous of these corporations and the families that control them. At the national level, corporations are sometimes able to influence government policy by lobbying members of Congress for or against particular pieces of legislation. The members of corporate rich families also exercise considerable social power by virtue of the fact that they often control large philanthropic foundations. Almost all of the large foundations in America were endowed by members of wealthy capitalist families. Moreover, many of these foundations are still controlled by these donors or their descendants. As a result, corporate rich families often determine which organizations and causes receive grants from these foundations. The control that these families exert over these foundations enables them to influence civic and cultural affairs at the local, regional, and national levels. Economic power is not always translated directly into political power. Indeed, the political power exercised by the corporate rich is subtle yet pervasive. For example, only a few scions of wealthy capitalist families are actively involved in politics. Those descendants of wealthy entrepreneurs who have entered electoral politics have usually done so as a means of personal fulfillment. In fact, many of the most important decisions are made by elites who occupy formal positions of authority in major institutions and organizations. These elites are usually affluent, but they rarely possess great wealth. Consequently, the corporate rich must exercise their political power primarily by influencing these elites. In the case of elected officials, the members of wealthy capitalist families are able to influence the selection of candidates by their campaign contributions. Large campaign contributions from the members of wealthy capitalist families provide a distinct financial advantage to those candidates who are willing to defer to the economic interests of these families and their corporations. Similarly, the members of corporate rich families sometimes use their foundations to fund conservative policy-research institutions that, in turn, issue reports and studies advocating policies that are consistent with their economic interests. In terms of political power, it is important to distinguish between the power of the corporate rich as individuals or families and the power of the corporate rich as a class. Although the boundaries between different social classes in America are vague and indeterminate, the corporate rich belong to a distinct and coherent social class. Specifically, corporate rich families form the core of the capitalist class in America. The members of these families constitute an identifiable social class for several reasons. First and foremost, they represent a social class inasmuch as the members of different families share certain economic interests. These shared economic interests stem from the fact that wealthy entrepreneurs and their descendants are typically principal stockholders in large corporations. As a result, they share a common interest in corporate profitability. The members of these families also constitute a distinct social class because their economic interests are often opposed to the economic interests of other large segments of the population. For example, the corporate rich are generally opposed to many of the government regulations enacted on the behalf of workers and consumers, at least to the extent that they impinge upon the profits of their corporations. In this regard, the corporate rich have important allies among the legions of small-business proprietors across the nation. Although they do not possess great wealth, the proprietors of small businesses have many of the same economic interests and political objectives as the members of wealthy capitalist families. The corporate rich have also forged alliances with other powerful groups in American society. In particular, the members of established corporate rich families have derived certain political advantages from their acceptance into the national upper class. Although the capitalist class and the upper class overlap to a significant extent, they are not identical. On the one hand, the capitalist class is defined in terms of economic interest and comprises primarily the officers, directors, and principal stockholders of corporations. The upper class, on the other hand, is defined in terms of social status and comprises the members of families that have been socially prominent for several generations. The fortunes of many upper-class families have become depleted over the years, and the members of these families are often unable to subsist comfortably on the incomes provided by their investments. Consequently, many of the scions of these established families have been compelled to take positions in business and government. Of course, they usually obtain positions that are commensurate with their social status. For example, scions of upper-class families often become partners in large investment banks, lawyers in prestigious law firms, professors at elite colleges and universities, or senior government officials. Some of these individuals from upper-class families eventually occupy positions of authority in the major institutions and organizations. In short, there is a great deal of overlap between the upper class and the power elite. The integration of corporate rich families into the upper class serves, therefore, to augment their power and influence at the national level. The essential question is not whether or not the members of corporate rich families exercise an inordinate amount of political power. It is abundantly clear that they are one of the most powerful groups in American society. Rather, it is whether or not these wealthy capitalist families as a class represent a dominant or ruling class. The corporate rich are obviously powerful, but they are far from omnipotent. Indeed, the very existence of progressive income and transfer taxes, for example, demonstrates that the members of wealthy capitalist families have not been able to prevent the passage of legislation inimical to their economic interests. By and large, the corporate rich favor substantial reductions in the level of government expenditures accompanied by corresponding reductions in taxes. At the same time, most of them accept, albeit reluctantly, the necessity for some minimal level of taxation. They understand that government, at the local, state, and national levels, performs many important functions that contribute to the profitability of their corporations. Corporations are dependent upon government at one level or another for the provision of important facilities and services, such as highway construction, police and fire protection, and education. Moreover, state and local governments, with the assistance of the federal government, are responsible for providing social welfare services to ameliorate the effects of unemployment. Last but not least, these corporations also rely on the fiscal and monetary policies of the federal government to maintain stable rates of economic growth. The members of corporate rich families may be resigned to the necessity of taxes, even to the inevitability of progressive taxes, but they are not about to relinquish their fortunes without a struggle. After all, wealth is the foundation of the corporate rich family and the source of all its privileges. Consequently, the members of these families take every opportunity to preserve their fortunes. As Karl Marx once proclaimed, "tax struggle is the oldest form of class struggle." The corporate rich have conducted their struggle against taxes on two levels. As individuals and families, they have employed elaborate strategies to avoid or reduce the taxes on their gifts and estates. On occasion, they have even sought special legislation or Internal Revenue Service rulings to relieve particular tax problems. Moreover, as a class, the members of corporate rich families have sometimes induced members of Congress, as well as presidents, to endorse tax reforms that have included reductions in the taxes on intergenerational transfers of wealth. Over the years, these efforts have produced a tax system that is formally progressive but still permits wealthy capitalist families to transfer the bulk of their wealth intact from one generation to the next. In the final analysis, the issue is not whether the corporate rich in America have lost any important political battles, but whether they have lost the war. For the members of these families, the most important war is the war for wealth. Although the corporate rich have lost some significant political battles, such as the imposition of progressive transfer taxes, they have certainly not lost the war for wealth. pps. 277-306 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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