Mr. Soros Goes to Washington: The Case for Reform of the Estate and Gift Tax Treatment of Political Contributions Eric G. Reis Partner Thompson & Knight L.L.P. 1700 Pacific Avenue, Suite 3300 Dallas, Texas 75201 214/969-1118 214/880-3183 (fax)
[email protected] Mr. Soros Goes to Washington: The Case for Reform of the Estate and Gift Tax Treatment of Political Contributions ∗ Eric Reis I. Introduction Politics is a billion-dollar growth industry.1 Despite Congressional efforts to restrain political spending, individual donors continue to make multi-million-dollar contributions.2 These contributions are often made through lightly-regulated “527” organizations, named for the section of the Internal Revenue Code that governs their operations.3 Like any surging business, 527 organizations and more conventional campaign funds attract contributors who have a keen interest in short-term success.4 But long-term political movements have also developed, soliciting funds for projects that will continue long after the rise or fall of a particular politician. The National Rifle Association actively solicits very long-term gifts and bequests to its sister charity, the NRA Foundation,5 with significant success.6 The political purpose of these bequests is only thinly veiled.7 More conventional political ∗ Partner, Thompson & Knight LLP, Dallas, Texas. A.B. 1992, Harvard University; J.D. 1996, The University of Texas School of Law, Austin. 1 See Center for Responsive Politics, 2004 Election-Overview: Stats at a Glance, at http://www.opensecrets.org/overview/stats.asp?cycle=2004 (reporting total campaign contributions of $1.35 billion to all candidates for federal office in the 2004 election cycle); Institute on Money in State Politics, Follow the Money, at http://www.followthemoney.org/database/power_search.phtml?sl=10 (select “All States” and “2004”) (reporting total campaign contributions in excess of $1.6 billion to candidates for state office in the 2004 election cycle).