(CNSNews.com) - As the U.S. Senate approaches a vote on whether to permanently repeal the estate tax, Arizona Republican John McCain faces more pressure to support the levy's demise.

The American Family Business Institute Saturday begins running a video ad on what it calls "more than a dozen high-traffic conservative blogs in key (presidential) primary states." The ad, which the group also promises to email to millions of conservative activists, warns McCain that "we're watching" and "we'll remember" how he votes on the estate tax issue.

McCain, who is believed to be considering another presidential candidacy in 2008, was the only Republican senator to vote against efforts to permanently repeal the death tax in 2001, according to the American Family Business Institute (AFBI), "when a long-dreamed-of Senate vote fell just short of passage."

The estate tax is applied on property transferred after death. But, in 2001, President Bush signed the Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which set up a schedule for the tax to be phased out between 2002 and 2009 and then temporary abolished in 2010. Without permanent legislation to abolish the tax, it will return to pre-EGTRRA levels in 2011.

The death tax targets family businesses and farms, which is very damaging to the economy, AFBI Communications Director Josh Kahn said.

"According to a study by the Heritage Foundation, it kills nearly a quarter million jobs each year, and that's a huge hit to the economy," Kahn told Cybercast News Service.

"That hit comes because it takes capital directly out of family businesses and farms at the most vulnerable time. In addition to that, they're spending money for years before someone passes away on life insurance schemes in order to avoid as much of the tax as possible, and that money would have gone to expanding their businesses and creating more jobs," Kahn added.

OMB Watch, a liberal group founded in 1983 to keep watch on the Reagan administration's Office of Management and Budget, opposes the permanent repeal of the estate tax.

Funded by organizations like billionaire philanthropist George Soros' Open Society Institute, OMB Watch claims that small farms and businesses are being used as a public relations face to gain sympathy for repealing the tax.

"This is about those super-rich families that don't want to pay this tax, and they need someone to put up so people will say, 'This is unfair,'" Adam Hughes, director of federal fiscal policy for OMB Watch, told Cybercast News Service. "Countless studies show that there are such a minute number of farms and businesses that are even anywhere close to the exemption levels, that this is really a non-issue."

The Americans for a Fair Estate Tax coalition, co-chaired by OMB Watch, has advertised its own position in recent months, including emails alerts, Hughes said.

The conservative ad targeting McCain is "one part of a wider campaign," Kahn said. In April, ads aimed at four senators whose votes may decide the fate of the tax - Democrats Max Baucus of Montana, Mark Pryor of Arkansas and Blanche Lincoln of Arkansas, as well as Republican Olympia Snow of Maine, began to air in the senators' home states.

The advertisement is part of one of the first issue advocacy campaigns to use Internet media and blogs, Kahn said.

"We're trying to use the newest media out there to go directly to the demographic that cares the most about the issues," Kahn said. "People who visit blogs are very politically active and very interested in issues."

Hughes said he believes McCain is opposed to full repeal of the estate tax, but that the senator might support a compromise that will produce a similar outcome to a full repeal from a fiscal standpoint.

"He's always been a great ally in the estate tax issue for us because he realizes that repealing this tax is a bad policy decision," Hughes said. "It's unclear at this point how things will shake out."

McCain's Senate office did not reply to requests for comment for this article.

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