Committee on Taxation and Economic Growth

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This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

This article is part of the Center for Media & Democracy's spotlight on front groups and corporate spin.

The Committee on Taxation & Economic Growth was an informal committee started in 1984 by Robert D. Tollison (Bob Tollison) and four other economists: Harold M. Hochman, Thomas E. Borcherding, Fred McChesney and Dolores T. Martin. This committee was supported by the Tobacco Institute (TI) through 'Ogilvy & Mather' (O&M) and Jim Savarese of 'James Savarese and Associates' (which had the same address and telephone number as O&M). Chairman was Robert D. Tollison but from the monthly reports is looks very much as an operation run by O&M.

1984

In June 1984 the U.S. Treasury Department held tax simplification hearings throughout the country. Maureen Delanty of O&M wrote in her monthly report on July 6, 1984 to Peter G. Sparber (TI Vice President)

"We participated in six out of the eight hearings, hiring local academicians in each city to prepare and deliver testimony against excise taxes. We arranged media coverage for the academicians and traveled to each city to coordinate their activities." [1]

Samuel D. Chilcote (President of TI) wrote in a letter dated July 16, 1984 "On short notice, we were able to encourage the testimony of different economists at six of the eight hearings. They presented their personal views on excises, which coincided with our own, and in some cases personal views on other aspects of taxation." [2] This proves that O&M was doing all of this on behalf of TI. All five economists who formed the committee plus Roger Kormendi participated in these hearings and in the 'August Monthly Report' Patricia Milita of O&M wrote to Peter Sparber on September 6, 1984

"• Agency wrote copy and began coordinating design for a brochure based on testimony before the Treasury Department. We will have a comprehensive estimate by 9/10/84. Black and white sketches of economists are $500; color are $850. We are proceeding with sketches as each economist submits his or her photograph." [3]

The brochure was called '...The U.S. "Deserves to Have a Tax System Which Looks Like Someone Designed it on Purpose."' The brochure looks like a booklet issued by the 'Committee on Taxation and Economic Growth' consisting of all the aforementioned economists minus Roger Kormendi. Nothing is mentioned about O&M or TI. In the preface of the brochure it said:

"The Committee on Taxation and Economic Growth opposes excise taxes and believes government should seek other ways to raise revenue. The following excerpts, taken from public testimony before the U.S. Treasury Department, present some of the strongest arguments against excises." [4]

Patricia Milita wrote in that same 'August Monthly Report' that they had "Hired Roger Kormendi to prepare testimony for submission to the Senate Finance Committee.". An excerpt of his written statement for the Senate Finance Committee was published in 1985 in a TI booklet called "Excise Taxes: the Fairness Issue" together with excerpts of statements from other people including several members of the 'Committee on Taxation and Economic Growth'. [5]

Patricia Milita reported on November 2, 1984 to Peter Sparber

"• Produced and delivered 2,000 copies of the U.S. Treasury Department brochure. All members of the Committee on Taxation and Economic Growth received copies.
• Obtained a P.O. Box for the Committee on Taxation and Economic Growth.
" [6]

On the Annual Meeting of TI on December 13, 1984 William Kloepfer (Senior Vice President of Public Affairs Relations for the Tobacco Institute) said

"Five of these economists have formed a Committee on Taxation and Economic Growth and with our help have published their views in a pamphlet. They travel anywhere to testify and have been helpful in lining up other expert witnesses. A tax reform and simplification seminar in Atlanta will be conducted by two of these experts in February." [7] (Robert Tollison and Fred McChesney participated in this seminar [8] [9] [10] [11])

1985

In a internal TI document (±1985) this committee was described as:

"Ogilvy & Mather and Jim Savarese worked with Professor Bob Tollison (George Mason University) in organizing an informal committee of economists from 42 states who have collectively and individually participated in activities on behalf of the tobacco industry in the areas of excise taxation and public smoking." [12]

On January 31, 1985 M. Hurst Marshall (Tobacco Institute Vice President) sent a list of economists who could "assist TI on the federal cigarette excise tax issue" as an attachment of a letter asking to spread this information to their lobbyists. [13] [14] This list covered exactly 42 states (although Hawaii and Maine had not yet an economist linked and for New York 2 economists were named), so it is quite sure, that all the economists on that list were member of the 'Committee on Taxation and Economic Growth'. Some of these economists were Ryan C. Amacher, Terry L. Anderson, Robert Ekelund, Richard K. Vedder and Richard Wagner plus the four economists who started with Mr. Tollison the 'Committee on Taxation and Economic Growth'.

Similar information was in the 'January Monthly Report' of O&M sent on February 12, 1985

"• Identified economists in 14 states (for a total of 42) and provided TI with CV's on each. We need to identify one more economist, in Hawaii. " [15]

Maureen Delanty of 'Ogilvy & Mather' reported on March 6, 1985 to Peter Sparber in the 'February Monthly Report'

"• Prepared 31 rough drafts of op-ed articles on tax reform based on phone discussions with economists in each Senate Finance and House Ways and Means Congressional district. (We worked with Bob Tollison and three other economists on this portion of the project) . Eight final articles have been submitted to papers for publication; others will be completed as soon as possible. Economists will send copies of their articles to their Congressmen, whether they are printed or not. We will forward published articles as they appear.

..

• Collected sources for earmarking brochure. Committee on Taxation and Economic Growth has agreed to endorse this piece. We will have first" draft by week of 3/11" [16] ('earmarking' = 'earmarking excise taxes to fund Medicare')

Ryan Amacher who was for sure a member of this committee [17] had one of his first tobacco industry friendly op-eds (the article 'Excise taxes must be understood') published on March 6, 1985 in Greenville News (Greenville, SC) [18] [19]

In the 'April Monthly Billing' of O&M Maureen Delanty reported on May 14, 1985 to Susan Stuntz (Director of Issues Management at the Tobacco Institute).

"• Drafted and revised article on tax reform and excises for submission to American Legion Magazine. Ryan C. Amacher, Ph.D., from Clemson University signed the piece." [20]

That article was published in the September 1985 edition of the American Legion Magazine. [21] [22]

Maureen Delanty reported on June 10, 1985 to Susan Stuntz in the 'May Monthly Report'

"• Delivered brochure on health care financing. We also printed stationery for Committee on Taxation and Economic Growth for cover letter signed by Bob Tollison. Distribution list is being compiled and brochure will be mailed as soon as possible.

• Continued to prepare op-ed articles on tax reform and work with area economists to place in newspapers in home districts of members of House Ways & Means and Senate Finance Committees. We are collecting originals of all published articles for distribution at TI and elsewhere.

..

• Arranged for Citizens for Tax Justice and [Harold M.] Hochman, professor at City University of New York, to testify before Representative Rangel on the taxation of low-income wage earners. This involved coordination of testimony with the subcommittee and making final revisions on Hochman's statement." [23]

The mentioned brochure was most likely called "Health Care Financing: we Can't Afford To Make A Mistake" [24] which was officially issued by the 'Committee on Taxation and Economic Growth' and mentioned the address: P.O. Box 65192 Washington, D.C. 20035.

On 19 June, 1985 Thomas E. Borcherding held his testimony against increasing excise tax on tobacco before the House Ways and Means committee [25] [26] and he had a similar testimony in California. [27]

Maureen Delanty reported on July 15, 1985 to Susan Stuntz in the 'June Monthly Report'

"• Distributed brochure on health care financing, under cover letter from Committee on Taxation and Economic Growth, to Congressional staff of all Members on the House Ways & Means and Senate Finance Committees." [28]

In the November 1985 'Public Relations Resource Catalogue' of TI the "Health Care Financing: we Can't Afford To Make A Mistake" pamphlet was described as

"- eight-page booklet of excerpts taken from various public statements and representing a wide variety of individuals and organizations
- Presents arguments for "Continuing a sensible discussion of Medicare solvency, against ill-advised quick fixes such as earmarking excises to support the program, and for instituting across-the-board cost containment reforms to protect the system over the long term."
- Immediate availability
- Most effective distributed to business, labor and health groups, can be used to fight earmarking for state health programs
" [29]

1986

TI did a 'Field Staff Evaluation of Resources' which was internally released in August 1986. [30] TI was afraid their funding would backfire

Robert Tollison (George Mason University) In his testimony on the District of Columbia workplace smoking Legislation, Tollison's knowledge was "good but, [his] presentation and persuasiveness [were] marred by his not admitting from the beginning that the study was sponsored by TI." (page 16)
The Tobacco Institute shows up as the funding organization. The motives of the industry are called into question for undertaking such a program. (page 18)
.. , as soon as an MD's funding from the tobacco industry is revealed, that witness loses the "pedestal" advantage. (page 25)

1987

Two years after the 1985 list of economists, M. Hurst Marshall sent on January 12, 1987 a letter plus an updated list of economists to the regional vice presidents. [31] [32] In the letter Marshall wrote that Jim Savarese had contacted everyone on the list to work with the 'State Activities' program of TI. Marshall also urged the vice presidents to call these economists before May 1, 1987 since they were already informed someone from TI would contact them. Some small changes (Matt Lindsay replaced Ryan Amacher in South Carolina, Maine had by then an economist named) but most of the names of the 1985 list were still there.

In a draft speech of William (Bill) Kloepfer sent to Samuel D. Chilcote on February 5, 1987 you can read:

"Our consultant, Ogilvy & Mather, has been our conduit in recruiting academic economists. Our first target, met two years ago, was to retain such a consultant in each state represented on the Congressional tax committees. Last year we shared with you the bundle of op-ed articles published by these people during the tax reform debate, all of them critical of excises. They're ready to respond similarly this year as events warrant, including at the state level.

We assigned a new series of op-ed submissions the first of this month, state by state, based on a priority list Roger [L. Mozingo] furnished." [33] [34]

1988

Paula Johnson Duhaime (manager legislative issues at TI) sent to regional vice presidents and regional directors on February 1988 a new list of economists who "are available for testimony, one-on-one meetings with legislators, writing letters and op-ed pieces in the states in which they teach, as well as in any state you deem appropriate." [35] [36]

Smoking and the State

In 1988 TI wanted to promote the book 'Smoking and the State' written by Robert Tollison and Richard E. Wagner. 'James Savarese and Associates' made a whole list of which economist in what state could write a book review for what paper. This list was sent by Jim Savarese to Jeff Ross (TI, responsible for the 'Excise tax issue') on March 31, 1988. [37] On that list some hand written notes can be found (Ryan Amacher in stead of Matt Lindsay) but it is unclear who made those notes. In TI's "Public Affairs Management Plan Progress Report June 1988" was written

"Promotion of the Tollison and Wagner book, Smoking and the State, continues. An executive summary of the book is near completion. Several members of the economists' network have completed critiques, which are in the process of being cleared for publication." [38] (emphasis added)

That network was most likely the 'Committee on Taxation and Economic Growth' and Ryan Amacher was one of the economists who wrote a review of that book in an article called 'Economists Explore the Dangerous Aspects of Government Protection' which was published on August 14, 1988 in The State (Columbia SC) [39] and which was reprinted in the Tobacco Observer in November 1988. [40]

1989

On January 11, 1989 an updated list of economists was issued covering 43 states and 64 economists including Gary Anderson, Jeffrey Clark, Dwight R. Lee, and Walter E. Williams. [41]

Alexis de Tocqueville Institute

In 1994 the Alexis de Tocqueville Institute (AdTI) made a pro-tobacco junk science report and Cesar Conda (then Executive Director of AdTI) asked Philip Morris if they could contact Tollison and some other people (if possible scientists, epidemiologists etc.) for the the 'Academic and Science Advisory Board'. [42] The final report ("Science, economics, and environmental policy: a critical examination" [43]) had a 19 member 'Academic Advisory Board' including Tollison and 9 other economists. So his network was still working. (see also Center on Regulation and Economic Growth & AdTI-Funding)

As can be seen in the article about Ryan C. Amacher, the activities of these economists were reported by 'Ogilvy & Mather' and later 'James Savarese and Associates' to TI. These organizations were also funded by TI, so probably most of these economists were not paid directly by TI but through these two organizations with the same address in Washington. Tollison himself was directly paid by TI.

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