Warren Buffet Should Heed Own Advice

Billionaire Warren Buffet said that he favors the estate tax and that it should be higher to tax the wealthy on the amount of their estates. The estate tax currently sits at 45% (and will increase to 55% without reform), which means that 45 out of every 100 dollars someone leave to an heir goes to the government. This is a tax on money that was already taxed at least once in the lifetime of the person and probably more than once, in all reality. The government taxes the money when it is earned, taxes any interest on investment and then gets nearly half of it when a person dies. This is why estate planners make a lot of money, to figure ways to pass wealth without paying taxes AGAIN.

Buffet though, does not live by this philosophy of taxing estates. He has ensured that his estate will be given away so that he avoids any taxes. His fortune is well over 40 billion dollars so his heirs would have to pay around 20 billion in taxes when he dies. This would help with the burden he says that the middle class bears but it is not what is good for him. He is giving a lot of his money to five foundations, most notably the Bill and Melinda Gates Foundation. There will be no taxes when he gives this so he avoided paying an estate tax. He has set up one billion dollar foundations for each of his children and they are to do philanthropic work with the money, no doubt after they draw hefty management fees from the foundations. This will avoid estate taxes and allow him to pass a great deal of money to his children.

Buffet is another do as I say liberal who thinks it is perfectly acceptable for the government to take money it did not earn from the pockets of people who received it from a loved one. He feels that it is OK so long as he (or technically, his estate) is not the one paying the taxes. Buffet cries about the plight of the middle class but he could make 1000 people millionaires for every billion dollars he has. If he is so concerned about people why does he not take 20 billion and make 20,000 people millionaires?

That would probably do more good than giving money to foundations that already have billions of dollars. But Buffet would rather see the wealthy taxed to death and since he has figured out how to avoid the estate tax he really does not care.

Of course, he assumes that other rich people are not as bright as he and therefore cannot avoid paying estate taxes.

Tax schemes created by the government lead people to think of creative ways to avoid paying those very taxes and the richer people are, the more creative they become. Besides, if Buffet is really concerned about the government, he can donate money to the treasury and they will be happy to take it.

I wonder why, if he really cares, he didn’t send his money there instead?

Source:
al Reuters

Big Dog



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