Opinion

Don’t the Sulzbergers count, too?

For sheer nasty hypocrisy masquerading as journalism, it’s hard to come up with as foul an example as Sunday’s 3,000-word Page One New York Times attack on Ronald Lauder.

A US ambassador and defense official in the 1980s, as well as head of New Yorkers for Term Limits, Lauder is a businessman, the chairman of Central European Media Enterprises — as well as a philanthropist focused on art and Jewish life.

He’s also, the Times says, the poster boy for “how the wealthy take advantage of the system” via “tax-avoidance techniques.”

The game the Times is up to is clear at the start of the article, with this false dichotomy: “A handful of billionaires like Warren E. Buffett and Bill Gates have joined Democrats in calling for an elimination of the breaks, saying that the current system adds to the budget deficit, contributes to the widening income gap between the richest and the rest of society and shifts the tax burden onto small businesses and the middle class. Republicans have resisted, saying the tax increases on the wealthy would harm the economy and cost jobs.”

This is flat-out false in at least three ways:

* Buffett and Gates have not called for eliminating the charitable tax break. In fact, they use it to avoid paying taxes on tens of billions of dollars more than Lauder — whose charitable activities are dwarfed by the Gates- and Buffett-funded Bill and Melinda Gates Foundation.

* If anyone has been calling for the elimination or reduction of special tax breaks in favor of a flatter, simpler system, it’s been not Democrats but Republicans like Rick Perry, Steve Forbes and Herman Cain.

* Ending special breaks doesn’t require “tax increases on the wealthy” — e.g., revenue-neutral tax reform could lower rates for all while broadening the base.

But what’s really galling is that Lauder’s “tax-avoidance techniques” and other supposed sins are also engaged in by the family that owns The New York Times.

The Times complains that Lauder’s “vast holdings . . . are organized in a labyrinth of trusts, limited-liability corporations and holding companies, some of which his lawyers acknowledge are intended for tax purposes.” Hmm: A recent proxy statement from The New York Times Co. notes the Sulzberger family’s “1997 Trust” holds 738,810 shares of the company’s Class B stock and 1,400,000 shares of Class A stock — stock that came from the trusts of Iphigene Ochs Sulzberger and Adolph Ochs.

Indeed, the Times is so wrapped up in trusts that the classic book on it is titled “The Trust.”

Plus, the Times family, like Lauder, has a limited-liability company — Marujupu LLC, named for Marian, Ruth, Judith and “Punch” Sulzberger.

The Times calculates that “after Estée Lauder died in 2004, she passed down nearly $4 billion to her heirs, according to tax experts who . . . estimated that the estate was taxed at an effective rate of 16 percent — about a third of the top estate-tax rate at the time.” Wonder what the rate was on Iphigene Sulzberger’s estate?

The Times complains about Lauder’s charitable giving. Well, the latest tax return of the Sulzberger Foundation, Inc., a tax-exempt private foundation headquartered at the same address as The New York Times Co., shows it with assets of $35 million and reports that it paid Marujupu LLC a $440,387 “management fee.”

The Times story pins its complaints about Lauder partly on people it describes as “tax-policy experts” — code for someone who agrees with the reporter and the editor. One is “Victor Fleischer, a law professor at the University of Colorado” — a state institution that pays no income tax at the corporate level. So, however much tax Lauder is avoiding, he’s almost certainly paying more than the University of Colorado.

Another Times expert is Scott Klinger, tax-policy director of Business for Shared Prosperity. He gets the last word in the article with the admonition, “The tax code shouldn’t allow the wealthy the kind of loopholes that let them, essentially, force other taxpayers to underwrite donations to their pet causes.” The Times doesn’t note that Business for Shared Prosperity is itself a nonprofit organized under sections 501(c)(3) and 501(c)(4) of the tax code. Pet causes and loopholes, indeed.

If the Times wants to start campaigning for tax reform that would simplify the tax code, I’d be first in line, maybe second behind Ronald Lauder. But this story seems not to be about that, but rather singling out Lauder, of all the high-net-worth individuals in the country, for negative scrutiny. He doesn’t deserve it any more than the family that owns the Times does.

Ira Stoll is editor of FutureOfCapitalism.com. In the late 1990s, he was a guest of the Lauder Foundation on a trip to Europe.