by Theodoric Meyer, ProPublica.
Oct. 15: This story has been updated with comments from the Edison Electric Institute.
Since August, a dark money group called Defend My Dividend has spent nearly $90,000 running ads on South Florida TV stations warning seniors about a looming increase in the tax rate on dividends.
“You worked hard, saved for retirement, and dividends are a big part of it,” says one of the ads, which Defend My Dividend has posted on YouTube. “But if President Obama and Congress don’t act this year, tax rates on dividends will spike, almost tripling in some cases.” Time is running out, the ad intones, as phone numbers for Obama and Congress appear on the screen.
The spot directs viewers to a website that gives few hints about the group behind the ads, which is described as a “national grassroots advocacy campaign.”
But there are indications the group is more Astroturf than grassroots: The website is maintained by the Edison Electric Institute, a trade association for big dividend-paying electric companies.
According to television ad contracts obtained as part of ProPublica‘s Free the Files project, the contact person listed for some of the Florida ad buys was Stephanie Voyda, the institute’s director. On many contracts, the Alliance for Savings & Investment, a group that represents dividend-paying companies, is listed as a co-buyer with Defend My Dividend.
Voyda did not respond to repeated requests for comment from ProPublica. Neither did Jim McCrery, a lobbyist and former Louisiana representative who serves as the manager of the alliance.
Tax analysts say electric utilities and other companies are concerned that the tax change could damage their stock prices. Dividends have been taxed at 15 percent since 2003, but the tax will rise unless Congress acts before the end of the year to extend cuts made under President George W. Bush. The Alliance for Savings & Investment successfully lobbied against a hike in dividend taxes in 2010.
The Defend My Dividend ads have run in Miami and West Palm Beach, two markets known for their large population of retirees. Curtis Dubay, a senior policy analyst at the Heritage Foundation, a right-leaning think tank, said the strategy made sense.
“Florida has the highest proportion of retirees, who rely on dividends,” he said.
Ryan Rudominer, the Edison Electric Institute’s executive director for communications, confirmed that Defend My Dividend, which he said had been formed in 2008, was targeting seniors in Florida.
“Paid ads have been running on national cable television, in print publications, and in select regional markets,” he said in an email. “South Florida has a strong concentration of senior citizens and retirees that rely on dividend income and would be negatively impacted by the looming dividend tax hike.”