Buffett: Keep Federal Estate Tax

Billionaire Tells Senate Finance Committee Inherited U.S. Estates Should Be Taxed

(AP)  Billionaire Warren Buffett, one of the world's richest people, told the U.S. Senate Finance Committee on Wednesday that Congress should keep the federal estate tax rather than repeal it to help a few rich Americans like him.

"I think we need to ... take a little more out of the hides of guys like me," Buffett told the Senate Finance Committee.

One of the world's richest biggest philanthropists, Buffett has been outspoken against efforts, mostly by Republicans, to repeal the federal tax on inheritances or reduce the rate. Such a repeal, Democrats argue, would amount to a huge windfall for the wealthiest U.S. families.

The fate of the levy effectively will be decided during next year's presidential and congressional elections.

Estates worth up to $2 million this year and next will be exempt from federal estate tax. Portions of estates above that threshold will be taxed at 45 percent.

In 2009, the exemption level rises to $3.5 million, and by 2010 the estate tax will be repealed, but only for a year.

Unless Congress changes the law, it comes roaring back in 2011 with a lowered exemption threshold of $1 million and a top rate of 55 percent.

Buffett said inheritance taxes preserve a measure of meritocracy, and with it opportunity, by recycling portions of great wealth through public coffers.

"The resources of society, I don't think, should pass along in terms of an aristocratic dynasty of wealth," Buffett told the panel. "I believe in keeping equality of opportunity as much as you can in this country."

Supporters of repealing the tax say it is particularly hard on small farms and businesses whose heirs may have to liquidate assets to pay the levies.

"Instead of the free market determining when assets are bought or sold, the death tax makes that determination," said Republican Sen. Chuck Grassley. "There is something fundamentally wrong when the government swoops in after a funeral to take a cut of what that person had worked their whole life for, and has already paid taxes on at least once."

According to the Internal Revenue Service, out of almost 2.5 million deaths in 2004, only about 19,300 estates paid the estate tax, said the committee's Democratic chairman, Max Baucus, who supports repeal of the tax.

Lawmakers and interest groups on both sides of the debate see several potential compromises, perhaps by freezing the exemption rate at $3.5 million and capping the tax rate at 35 percent.

[cpaide]

"I think we need to ... take a little more out of the hides of guys like me," Buffett told the Senate Finance Committee.

I agree. But let''s repeal the federal tax and let the state of Nebraska impose a special estate tax of 80 percent on estates in excess of $1 billion.

A repeal of the federal tax on inheritances would amount to a huge windfall for the wealthiest U.S. states--not families. Just ask Connecticut, Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Ohio, Oklahoma, Pennsylvania and Tennessee or any other states that have estate, death, gift or inheritance taxes that are independent of the federal system.

[frb01]

My father saved money and worked hard all his life. He was not a multi-millionaire, he just accumulated wealth that was taxed along the way at least once. When he died in 1998, Bill Clinton said only 3000 estates paid taxes that year, well in our case it was 1000''s of dollars which we could have donated to charity, which we have done in the years since his passing, or used it to build a fund for college educations for grandchildren he never saw. I am tired of politicians worth 25, 30 or 50 million talking about this like it does hurt. It hurts Americans who moved from the lower class to the middle class in a generation. Buffet is wrong.

[incog-nito]

Buffet is absolutely right.

[incog-nito]

And another thing, remove tax-exempt status from "non-profit" organizations. Then they can be as political as they want.

[bthrasher102]

Buffet is right when talking about people with estates of say 100 million or more. Anything lower than that should be allowed to be kept by the people who earned it. Buffet can say what he did because he is old and rich beyond belief. His kids will be billionaires even after the estate is paid. The best solution would be to allow the rich to keep any amount of wealth as long as it is invested in a U.S. company that is service based and or manufactures all of its products in the U.S.

[idlepugilist]

bthrasher103 made an idealistic statement...essentially it should be ok for people with estates of $99 million "ong as it is invested in a U.S. company that is service based...in the U.S." Another illusion. First nobody is talking about depriving the wealthy (let''s see, if you take away a certain amount of money they couldn''t spend in a lifetime, and leave them with multiples of amounts they couldn''t possibly spend in a lifetime...), and second, the wealthy were mostly likely already provided tax shelters and loopholes to acquire their immense wealth. Opposite of sur-taxes, the very wealthy expect sur-tax breaks.
No, my republican friends, the indentured slaves to these wealthy people expect the wealthy to share their unbelievably, incredibly good fortune. No bull about capitalism here, folks, because the parents of 4 making $75k are trying very hard to understand

[incog-nito]

One more thing: Charitable donations shouldn''t be tax deductible. People can give all they want, but other taxpayers shouldn''t have to finance part of it. Also this just encourage people to fudge the numbers to get a bigger deduction.

[standlee5]

"Unless Congress changes the law, it comes roaring back in 2011 with a lowered exemption threshold of $1 million and a top rate of 55 percent."

Just in time to nail all the baby boomers. They don''t need to take our money after we die. We''ve worked hard to pass it on to heirs not the govt.

[far_point200]

What article didn''t tell was that Buffet was in no way in hell going to let his fortune fall into the hands of the US Treasury. He will place it in a trust with Gates upon demise.

A trust with how many trustees? A dozen maybe? Are their interests aligned with the will of the people?

Such an enormous concentration of power residing in the hands of a small group "trustees" is just a little bit scary!

But what is even scarier is what Buffet & Gates are saying to the rest of us.... we would rather control that enormous power with a few who think like us rather than letting our elected officials control it!

They are now in effect competing with government for financial power to make (hopefully) positive things happen because they know our government is broken and is incapable of providing the things that many people are demanding.

Maybe competion is exactly what is needed to make a more lean and mean government!

[andor3]

exactly! Mr. Buffett shows his wisdom once again.

A rich person should leave his/her kids with an education in how to work to make money (or make money work depending on your perspective), not a pile of money so they never need to work.

[jetranger7]

I say quit taxing taxes on FOOD products !!! too !!

[jowand]

Warren Buffet can voluntarily pay more taxes if he wants to so can his rich buddy Bill Gates, it''s perfectly legal and in the tax code. How much is Warren Buffet paying over and above what is required of him, ZERO.
Instead he and Bill Gates are throwing money all over the globe in lieu of doing something good with it over here in the USA; guily conciences maybe?
Warren Buffet lives in financial la-la land, he doesn''t have clue what it''s like to look at monthly bills and wonder where the money might come from.

[jowand]

But what is even scarier is what Buffet & Gates are saying to the rest of us.... we would rather control that enormous power with a few who think like us rather than letting our elected officials control it!

They are now in effect competing with government for financial power to make (hopefully) positive things happen because they know our government is broken and is incapable of providing the things that many people are demanding.

Maybe competion is exactly what is needed to make a more lean and mean government!

Posted by far_point200 at 11:48 PM : Nov 14, 2007

It''s their money not yours or mine.

[missingamerica]

Buffett didn''t get rich by being stupid; he knows that an economy is a pyramid, and if the Republicans succeed with another assault on ours, they''ll just further weaken the pyramid''s foundation at the same time as they''re putting more weight in its wealthy apex.

Many civilizations and governments have crashed throughout history; inevitably, words like "decadence" are used to explain away their demise.

But the reality is as those in power siezed more and more wealth for themselves, those below them first lost the will to fight for a society which did not reward them and then eventually realized that the elite themselves represented a readily accessible source of wealth that was ripe for the picking.

There have been lots of idiots over the course of human history who sought to steepen the slopes of the inequality curve because they couldn''t see beyond their greed.

[phydeux1]

Uh Jowand, you might want to read before you rant. He made this statement to Congress, which means he DOES want our elected officials to have the control. I''m sure he wasn''t the only person testifying to Congress on the subject.

And Neither Buffet or Gates can pay more in taxes, anymore than you or I could. Sure, they can overpay in withholding if they choose to. But when tax time comes around in the spring they''re just going to get the excess back as a tax refund.

If they want to protect farmers however, they can just build in some sort of "agricultural family business" exemption. That way you don''t get taxed for the farm you pass on to your kids.

BTHRASHER, sorry, you can''t dictate by law where someone invests their money just because they''re rich. That''s not government''s job and it would just create even MORE bureaucratic red tape.

[excoachken]

Why should anybody be able to pass on obscene wealth. Kids who get the "golden spoon" stuck intheir mouth as a birthright, grow up to be unproductive, egocentric, arrogant, and entitled adults like "W" How about a cap of a reasonable starter fund (for your children) that would be allowable and the rest "recycled" in to raise the "quality of life" of the rest of our collective offspring by reducing the national debt.

[why_not_nar]

This guy is just a class act. Since he is donating his money, i would love to see him donate his time toward fixing our country. He would have my vote any day.

[creeper00]

Omaha''s Warren Buffett is an example of the clarity of thinking you can find if you go outside the Beltway.

That alone is probably enough to make the pols ignore him.

[mbcsmith]

Let''s see, Since Buffet gave his money to Gates, Buffet won''t be paying a nickel of estate tax. It''s EASY to say everyone else should pay. No kudos for Buffet here. He hired a dozen lawyers to avoid the tax.

[mbcsmith]

Every nickel earned by Americans is taxed in the year of earnings. THEN, when you die it is taxed again. Seems like the old double taxation scam.

[bthrasher102]

You can dictate where people invest money. Most tax credits and some deductions are aimed at getting people to invest in certain things. I''m saying give taxpayers a break on their estate tax if it is invested in certain parts of the U.S. economy. This creates jobs and or keeps them in the U.S. That would work much better than giving it to the government so that they can turn around an give away what they don''t spend on their own excesses. Also, people can and do overpay their taxes all the time. The IRS will never ever give you a refund unless you ask for it. If you file a return showing all income and no deductions, exemptions, withholdings, etc. they will let you pay more than you should.

[micma-2009]

When all the wealth of a country is concentrated in the hands of a few, Democracy is finished.

That''s where Republican "trickle down" economic policies are taking us.

[micma-2009]

Buffett said inheritance taxes preserve a measure of meritocracy, and with it opportunity, by recycling portions of great wealth through public coffers.

"The resources of society, I don''t think, should pass along in terms of an aristocratic dynasty of wealth," Buffett told the panel. "I believe in keeping equality of opportunity as much as you can in this country."

[drudge2]

I think we should be willing to admit that there is an aristocracy.
We could then go on to make demands of the Aristocracy.

[amazedd]

It makes sense that the 2nd richest person should be backing the second most powerful party.

[ov442]

First of all, consumer spending is the source of almost all wealth. it accounts for over 70% of the GDP.
So hoarding money at the top, where it gets invested and saved and held, does not promote economic growth. Putting it back into the economy does.

Tax Laws that help the wealthy keep their wealth or increase it, are stupid.

However, .... i dont believe in completely unfair taxation either.
I think a compromise is in order, such as the last paragraph of the article. The scale limits should be raised to reflect the increase in so many millionaires and higher over the last 10 yrs. A $1Mill limit is too low. I''d say look at the asset values and find a useful limit such as $5 mill and stick wtih that for 10 yrs and re-evaluate then. And just exempt Farms and family business from the large amounts and that''ll shut up the politicians making excuses.

No matter how rich you are, and how determined you are to crush everyone around you so you can have your own personal empire, you shouldnt be taxed at a 55% rate. Thats rediculous. Now, the Loopholes need to go though because they are reducing the tax that rich people pay to a rate lower than middle income people pay. Thats Diametrically opposite of good tax policy.

The most recent tax laws that Bush has enacted have dropped Buffet''s total tax burden to a lower rate than his secretary. Thats immoral.

[jn122736]

The average American is a natural born dreamer. Everyone believes he/she will be successful in life. Except for a few times in our history such as the 1930%u2019s (great depression) everyone at least had the same basic opportunities.

Most of today%u2019s millionaires/billionaires made their fortunes due to the opportunities afforded by the anti-monopoly and tax laws of the post %u201Cgreat depression%u201D era.
Our rich and/or greedy elected leaders have now gutted or ignored those laws to the point where average Americans no longer have those same opportunities.
Now they want to eliminate the inheritance tax so their offspring will be born into royalty without having to earn their way in life.

These people have taking control of the minds many people by demeaning such valuable and meaningful words as Liberalism and socialism and by referring to the inheritance tax as the death tax. The hardest part for me to comprehend is that people are gullible enough to fall for it over and over again.

The children of the working class will be doomed to a lifetime of virtual slavery while the children of the rich will be their masters.

There will be no such thing as becoming wealthy by inventing something because those, already wealthy, owners will own the patent rights to anything their workers/slaves invent.

So much for the %u201Call men are created equal%u201D and %u201Cland of the free%u201D fantasies.

[oscarez]

"No matter how rich you are, and how determined you are to crush everyone around you so you can have your own personal empire, you shouldnt be taxed at a 55% rate. Thats rediculous."

But it''s OK to tax a person making $50,000.00 a year at 25% each and every year?

[oscarez]

Warren Buffett is a man of integrity and honesty. A man who cares about the future of this country and is willing to put his money where his mouth is. integrity and honesty are more important than being rich.

[realpatriot1]

mbcsmith,

The person who was originally taxed is dead. The recipient of this unearned(by them)income is being taxed for the 1st time.

[oscarez]

The GOP headed by president Herbert Hoover (1929-1933) all most destroyed the U.S.A.

"After the crash Hoover announced that while he would keep the Federal budget balanced, he would cut taxes and expand public-works spending. However, he signed the Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 dutiable items. This act is often blamed for deepening the depression, and being Hoover''s biggest political blunder. The Hoover administration''s tightening of the money supply (for fear of inflation) is also regarded by most modern economists as a mistaken tactic given the situation."

From: http://www.heartheissues.com/presidents-31-herberthoover.html

It will take years to correct the problems George W Bush, another Republican, has created. We need men like Warren Buffett to help solve these problems.

[mitywhity]

He''s an idiot when he is out of his realm. And clearly, he is out of his realm. He''s more socialist than capitalist.

[vancouverboo]

The Rich People are so powerful, and their army of lawyers can twist everything to make evil seem good. The tax is not a tax on wealth. It''s a tax on the transfer of wealth to others. The others take what they get free and clear. They pay no tax on their inheritance. It is not income to them for an incomve tax.

[ms38654ob]

The estate tax should stand. I think the idea of leaving it at 3-4 million and 35% above that is reasonable.

[mbcsmith]

The person who was originally taxed is dead. The recipient of this unearned(by them)income is being taxed for the 1st time.


--------------------------------------------------------------------------------

Posted by realpatriot1 at 10:46 AM : Nov 15, 2007

1. Inheritance is NOT income.
2. The money is taxed in the decedant''s estate. This is an extension of the dead taxpayer.
3. It is the same money that was already income taxed.
4. DOUBLE TAXATION on the same money.

Assume your father built a business that grew to $5 mil. in assets. It has $100,000 in cash and the rest is invested in machinery and equipment to keep the business going. It employs 75 people.

Dad dies and his wish was for you to continue the business, which you are happy to do.

The approximately 2 million tax bill forces you to either go deeply into debt or sell the business to pay the tax. 75 people out of jobs.

[name_verify]

Who put Buffet in charge?

[afmca]

Eliminating the estate tax has always been the goal of the Republicans because they dream of a permanent aristocracy. They love how Saudi Arabia has evolved where the rich have all the power and wealth and the rest of the population is placed under the rule of the religious zealots. Buffett must really make those Repub and Demo politicians angry with his rationale approach to the death tax. I think the compromise is workable that would protect small businesses and farms and not allow the others to create a permanent priveleged class - that would put another nail in the American democratic coffin.

[one_american]

What a typical liberal Buffett is.

Warren Buffett should keep his comments reserved for himself; if he wants to volunteer to pay the estate tax, then he is free to do so.

But he has no right to speak for small business owners who can use that money to re-invest in their company, and to pay higher wages and employ more people.

And as is widely known, small businesses are the engine that drives American economy.

[radiob-2009]

I recall some words of wisdom from Buffet a couple years back regarding 401k''s in which he stated that the stock market would take a substantial hit around 2020 due to all of the "investors" retiring. Buffet is no fool by any means and knows full and well that those who wish to avoid the estate tax can do so legally for minimium cost if they plan. People that are complaining about double taxation are not seeing the whole picture. They fail to realize virtually every good for consumption or use is not only double taxed but often taxed 4 or 5 times adding to the final price of the goods. What is different about this? The inheritors have not earned the money simply by association or blood and if the "grantor" truly wanted them to avoid double taxation they could enact measures prior to their demise to do so.

[oscarez]

"And as is widely known, small businesses are the engine that drives American economy."

How many small businesses in the US have assets of $2,000,000.00 or more. Estates worth up to $2 million this year and next will be exempt from federal estate tax.

[takebackusa]

but.. if we repeal the inheritance tax, Paris Hilton will have to pay more ! How unfair ! lol

[rowdytexan2]

Go Warren Buffet!

This is just another ruse to keep the money for big businesses. Keep it all in the family! Those people have already paid less taxes than anyone else in the United States. They''ve written off their living through claiming it as business expenses, then not showing any profit. Their families have already benefited for YEARS!

The republicans have already mechanized businesses to operate on clear profit! The American public is paying for their assets, as well as their gains in wealth!

The wealthy are already allowed to transfer huge amounts of their wealth to their families before they die, tax free!

The estate tax is pretty near the ONLY time that this money has been taxed!

[dcamp2909]

No one who will benefit from repealing should be allowed to comment on it!

[radiob-2009]

RowdyTexan

And the wealthy can still avoid taxes on this if they use their brains and a little bit of capital along with planning.

[mbcsmith]

Guess what, if you are a tycoon who has created an empire with and only with the labor of the American workers, then you can not bail out of your social contract with those laborers.
Posted by curse914 at 11:06 AM : Nov 15, 2007

LOL..Typical socialist babble. You work, you get paid. That is the contract, nothing else.

[mbcsmith]

What your narrative does is provide cover for the Paris Hiltons of the American Aristocracy. What amazes me is that the Elites do no even bother with the pretense of sophistication any more. Do you think that Paris Hilton could run her fathers business? Do you think that education was a priority for this family even when they had all the time and resources to make it so? Posted by curse914 at 11:35 AM : Nov 15, 2007

WOW! Very convuluted of you. How about this LIB. Let''s raise the exemption to $10 mil. That way, the small businesses of the country can survive but Paris will still pay dearly.

[terrapin78]

Freedom is not free.

And it cost is not only flesh and blood.

I don''t understand why supposedly patriotic people don''t want to pay for these freedoms with $$$$$. I was raised that paying taxes is an act of patriotism.

[afmca]

Two statements from the article:
1. Internal Revenue Service, out of almost 2.5 million deaths in 2004, only about 19,300 estates paid the estate tax,
2. compromise - freezing the exemption rate at $3.5 million and capping the tax rate at 35 percent.

So, it isn''t even that big of problem. Most people die with estates of far less value then is needed to be taxed. I don''t think Buffett or most of us are saying do away with the exemption totally, but it seems like those compassionate neo-con Repubs on this blog want to do away with the tax completely. They play so well into their Repub handler hands - I find it amazing how many Repubs cut their own economic throats just to serve their rich, immoral masters.

[antoniof123]

Does anyone see a pattern here just a few days ago major companies CEO''s were saying what is an extra 5 percent on our taxes.

I think they realize that they may have broke the camels back and now what to minimize the damage to themselves.

I know that Warren Buffet is a nice guy but I think he realizes that it is going to be too late if they don''t do something quick.

[mudrose-2009]

Warren Buffett just has to fill out a form and his taxes will be kept. Like all the rest of the pundits, he too is full of *****.