Warren Buffett Plans to Dodge the Death Tax

Everyone is oo-ing and ah-ing about Warren Buffett’s noble decision to give his wealth away to the Bill and Melinda Gates Foundation. But how noble is that?

James Taranto recalls that Buffett is supposed to be opposed to ending the death tax. Yet by giving his money away to the Gates’s foundation he is just as surely dodging the death tax as if the death tax were repealed.

If Warren Buffett is is favor of the death tax then he should just sit there and let the government take his wealth, or 55 percent of it, when he dies, and not engage in tax avoidance schemes.

The argument against the death tax is that it penalizes the owners of small businesses. If you own a business worth about $20 million then when your heirs have to pay the full death tax then they will likely have to sell the business to pay the death tax.

But that doesn’t apply to a publicly traded company like Buffett’s Berkshire Hathaway which is traded on the stock market. The heirs, who may or may not be involved in management, just sell stock on the open market to pay the death tax and the business goes on as before.

Let’s repeal the death tax or failing that reduce it to five percent so that we doesn’t force heirs to sell the family business or the family farm.