Clinton Campaigns With Warren Buffett

Hillary Rodham Clinton argued Tuesday for keeping the inheritance tax in place, saying it is a key to ensuring the United States remains a meritocracy.

At a joint appearance with billionaire investor Warren Buffett, Clinton said the inheritance tax, due to be temporarily repealed in 2010, was a symbol of "what kind of society we are."

"The estate tax has been historically part of our very fundamental belief that we should have a meritocracy, that we do not want a system… to be, over time, dominated by inherited wealth," she said. "That we do believe that people should have to get out there and make their way, to a great extent."

Buffett, one of America's wealthiest men, told the Senate Finance Committee last month that the tax should remain in place.

Estates worth up to $2 million this year and next will be exempt from the 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 In 2009, the exemption level rises to $3.5 million, and by 2010 the estate tax will be repealed - but only for a year.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, the tax returns in 2011 with an exemption threshold of only $1 million and a top tax rate of 55 percent.

Democrats argue that a repeal would amount to a huge windfall for the wealthiest families.

Buffett said Republicans, who have led the effort to repeal the tax, "are going to keep the farmers out in front of the argument" as a public-relations ploy. Proponents of repeal often argue that it will mean families will lose control of farms and small companies.

But, Buffett said, only six-tenths of 1 percent of taxable estates in 2007 were farms.

"It's not as though people will be destitute," Clinton said.

In a subsequent appearance on the Fox Business Network, Clinton repeated her support for keeping the tax.

Asked whether she would let cuts in capital gains taxes expire, Clinton said: "I am more focused on preventing the repeal of the estate tax and returning to what I think are fairer, more effective tax rates for the wealthiest."

"While people like my husband and I have enjoyed a great series of gifts from the Bush administration, that is not what has happened to the vast majority of Americans," she said.

Her remarks drew a rebuke from California Republican Party Chairman Ron Nehring.

"Hillary Clinton's death tax is just another tax on assets that have already been taxed," Nehring said. "Under Clinton's plan, family-owned businesses and individuals stand to lose half of everything when the business and/or property pass from one generation to another."

The Clinton-Buffett appearance was their second this year, following a similar session in June in New York.

Like that appearance, Tuesday's question-and-answer session was a fundraiser that brought in $1 million for the campaign of Clinton, the Democratic presidential front-runner. From San Francisco, she headed to Sacramento to pick up another $300,000.

In San Francisco, the biggest campaign donors got special treatment from Clinton and Buffett, including an extended picture-taking session that caused their "conversation on the economy" before an audience of 1,500 to begin later than scheduled.

Clinton played moderator and questioned Buffett - one of the world's richest people with a net worth of $52 billion, according to Forbes magazine - about the economy. Buffett is chairman and CEO of Omaha, Neb.-based Berkshire Hathaway Inc., an investment company he founded.

Buffett and Clinton warned of the dangers of a growing gap between rich and poor, and a tax system that disproportionately helps people Buffett called "these super-rich" - himself included. Both said political and economic instability could result.

"In the last seven-eight years what has happened is that the super-rich have gotten a huge break," Buffett said.

Said Clinton: "There's a growing sense that it's not working for the average American. If people feel that for whatever reason the deck is stacked against them, then that does feed the instability."

Republican Rudy Giuliani also was in California on Tuesday to pick up checks at a private fundraiser in San Juan Capistrano. Along the way, he made a brief stop at a Santa Monica cafe to meet with supporters.

After pumping hands in the crowd and conversing playfully with a ketchup-covered toddler, he answered a few questions from reporters before leaving in his black SUV, reiterating his support for a strong position on Iran, defending his immigration policies in New York and talking supportively about lower corporate taxes.

He also said the minimum wage should be examined again "at some point," but stressed Congress must consider the "tradeoff" between increased wages and the potential for lost jobs.
Profiles and the latest stories from CBS News and around the Web on the Democrats and Republicans running for the White House