Seattle's Martin Selig says he's not driven by self-interest but by a belief that the tax hurts small businesses. His gift makes him one of the biggest initiative donors in state history.

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Supporters of Initiative 920, which would repeal Washington’s estate tax, tout their campaign as an effort to help small business.

But if campaign contributions are any measure, no one has a greater stake in I-920 than multimillionaire Seattle developer Martin Selig.

Selig has contributed nearly $1 million to the I-920 campaign, making him the top individual donor to any initiative campaign this year and one of the largest donors in state history.

He’s given more than two-thirds of the money raised by the Committee to Abolish Washington State Estate Tax, which filed I-920. His checks helped cover the $790,000 paid to a Lacey signature-gathering firm to qualify the measure for the Nov. 7 ballot.

Selig says he is not bankrolling the I-920 campaign out of self-interest. Like many wealthy people, Selig said, he can afford to pay estate planners and attorneys to minimize his tax liability. He said he had no idea how much his estate would owe.

But he said smaller business owners will have a harder time — and he argues the tax puts Washington at a competitive disadvantage with states that have no inheritance tax.

“My point is the estate tax hurts the middle class. It hits the small businesses harder than anyone else,” Selig said.

Selig, 70, has long been one of Seattle’s most prominent developers. In 1985, he built the 76-floor Columbia Center. The tallest building in the Northwest, it helped spur a citizen initiative to limit downtown building heights. His Sedgwick James tower is known around town as the “Darth Vader Building” for its dark, imposing appearance.

Selig’s Seattle properties are worth at least $378 million, according to the King County Assessor’s Office.

For all his impact on Seattle’s skyline, Selig has often kept a low profile when it comes to politics. That started to change in 2004, when he took a dislike to the proposed Seattle monorail, which would have run past some of his downtown properties. He gave more than $350,000 to the monorail recall campaign.

The I-920 campaign marks his most intense political involvement yet. His $922,000 contribution puts him among the top individual donors to any initiative campaign ever in this state, according to the state Public Disclosure Commission. (Microsoft founder Bill Gates and John Walton, of the family that founded Wal-Mart, each gave more than $1 million to a 2004 initiative favoring charter schools.)

Washington’s tax applies to about 200 estates per year — about one half of 1 percent of all deaths, according to the state Department of Revenue. Estates worth less than $2 million ($4 million for couples) are exempt, and the value of property used primarily for farming can be deducted from the taxable estate.

The state’s tax rate starts at 10 percent and climbs to 19 percent for the largest estates. That’s in addition to the federal estate tax.

Washington’s tax was created last year by Gov. Christine Gregoire and the Democrat-controlled Legislature. The money generated — about $100 million a year — goes to a dedicated fund to pay for schools. A citizen initiative repealed a previous inheritance tax in 1981.

In approving an estate tax, Selig said, lawmakers linked it to education to put “a fancy shirt” on it.

A question of equity?

If the tax is repealed, that money will go away, all for the benefit of the state’s wealthiest families, say opponents of I-920.

Initiative opponents say the estate tax helps make the Washington tax system more equitable. Because the state has no income tax, it relies heavily on sales taxes, which disproportionately affect the poor and middle class.

“We have to remember, the owners of these businesses have been benefiting from Washington state’s deeply regressive tax code for their entire work lives,” said Sandeep Kaushik, spokesman for the No on 920 campaign. “They’ve been enjoying a huge tax advantage for decades of their lives and have been allowed to escape paying their fair share.”

Selig counters that businesses already pay a lot of taxes. Every time he constructs a new office tower, Selig said, he generates millions in payroll taxes, sales taxes and other business taxes.

“Do we pay our fair share of tax? You’re damn right we do,” he said.

Estate-tax foes have raised more than $1.6 million in support of I-920. Most of that flowed through the Committee to Abolish Washington State Estate Tax, which has raised $1.3 million, thanks largely to Selig’s money and a $75,000 contribution from John Nordstrom of the department-store family.

A separate, business-backed committee, Keep Washington Business Alive, has raised about $330,000, including contributions from some Washington newspaper owners, in support of I-920.

Seattle Times Publisher Frank Blethen has spoken out repeatedly against estate taxes, and The Seattle Times Co. has made an in-kind contribution worth $750 to pay for the consulting time of Jill Mackie, a Times vice president and lobbyist. Other newspapers have given cash contributions, the two largest being from The Wenatchee World and from Pioneer Newspapers, owner of the Skagit Valley Herald; both gave $25,000.

Those contributions show the real motivation behind I-920 is to protect the very wealthy, not small businesses, Kaushik argues.

“Follow the money. Who is actually bankrolling this campaign? Is Frank Blethen a small businessman? Is Martin Selig a small businessman? Is John Nordstrom a small businessman?” he asked.

Opponents of I-920 have raised even more money to defeat it: $1.7 million so far. They, too, have relied on some big-money donors, including Bill Gates and his father, William H. Gates Sr., who together have given $285,000. National and state teachers unions have given more than $900,000.

Bad for businesses?

Selig said Washington’s tax will only make the state less competitive when businesses look around for new places to locate.

He said he’s had potential tenants decide to go elsewhere after considering Washington’s estate tax and the state’s tax on gross business receipts. When asked to cite examples of such businesses, Selig declined, citing the confidentiality of negotiations.

Estate taxes only discourage entrepreneurs such as him from investing in their businesses, Selig said.

“If I stop building, do you know how many people don’t have a job?” he said.

Selig said his real-estate company directly employs 160 people, and hundreds more indirectly when he is building new office towers.

Selig said he does not know how much his estate would pay if he died right now.

He’s gambling that his checks for I-920 will make it so his heirs won’t have to find out.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com