Warren Buffett: Wealth By the Death Tax

Grover G. Norquist explains why Warren Buffett is a big fan of the estate tax:

It doesn’t take a genius to see how certain industries could make a tidy profit off these death-tax escape hatches. In fact, some of the most ardent opponents of permanent death-tax repeal are (surprise, surprise) estate lawyers (who set up the trusts), charities (who fear their spigots of money turning off), and the life-insurance lobby (which does all it can to preserve its tax loopholes).

Buffett has major investments in companies that sell life insurance. The death tax has helped make him rich while it has made other families poor. What’s sad and ironic is that it takes families with the resources of the Buffetts (and the Hiltons and the Kardashians) to set up the trusts and life-insurance schemes that are necessary to avoid paying the death tax.

And who ends up paying? Let’s say a farmer has worked the fields all his life and dies. He’s land-rich, thanks to the exurb that popped up next door, and his “estate” is worth several million dollars. But his kids are given a tax bill for a couple hundred grand. What would you do? Like millions of others, you’d sell the farm (and all the memories) just to pay the tax bill.

All the while, the lawyers, charities, and life-insurance salesmen leech off the family farms and small businesses that are faced with this situation.

Buffett is another of those leeches. Buffett is another of those leeches. As the American Family Business Institute’s Dick Patten has said:

The “Oracle of Omaha’s” wealth has come from making wise investments in three different business activities. First, he’s made substantial investments in major corporations that he believes will appreciate; second, he operates a huge casualty and life insurance business which provides massive reserves of cheap capital to support his other two investing activities; and third, he purchases family owned businesses at fire sale prices. The last two practices are directly dependent on the death tax, and it’s unlikely that Mr. Buffett would be the world’s second richest man without it.

Buffett has a conflict of interest. If the death tax goes away for good, so does much of Buffett’s wealth. He’s doing everything he can to make sure the death tax comes back in full force. It’s wrong, and somebody on the Senate Finance Committee needs to grill him about it.

You can be sure that those Buffett billions will not go to Uncle Sam but to the Gates Foundation.You might say Warren has a history of not paying his "fair share" of taxes because he wants you to pay them.