Even so, the super-wealthy don’t mind the idea of wealth redistribution. They have already accumulated more than they and their survivors can spend in several lifetimes. Thus, Warren Buffett and his billionaire cronies lobby Congress to keep the death tax while embracing sophisticated tax shelters available only to the super-rich.
Buffett and Bill Gates dreamed up the “giving pledge” to encourage other mega-rich plutocrats to promise to give away at least half of their wealth “to philanthropy” during their lifetimes or at death.
Buffett concedes that his apparent magnanimity involved no personal sacrifice — unlike ordinary people, who “regularly contribute to churches, schools, and other organizations,” relinquishing “funds that would otherwise benefit their own families,” meaning “forgone movies, dinners out, or other personal pleasures.”
Buffett signed the pledge voluntarily and “will give up nothing” as a result. Yet he thinks the government should increase taxes on those who already give to charities in amounts that require forgoing movies, dinners out, and other creature comforts that billionaires will never lack.
So, if he loves taxes so much, why didn’t he give the money to the federal government? Buffett’s answer is that his charity does a better job at allocating resources. He says his charitable foundations “do a better job with lower administrative costs and better selection of beneficiaries than the government.”
You can say that again. So why exactly does he advocate tax increases that will take more money from private-sector organizations that “do a better job than the government”? The estate tax, like the giving pledge, causes the mega-rich to give up nothing that they need or want.
For those citizens who don’t hire advisors to help with sophisticated tax planning, a confiscatory death tax regime encourages them to dissipate their wealth on high living, reduced savings, earlier retirement, and less investment. Enjoy it while it lasts, before the government takes it all.
Meanwhile, the merely-rich or almost-rich need only hire lawyers, insurance agents, and accountants to structure their financial affairs in ways that avoid a whopping tax bill. Just pay a few thousand dollars in advisory fees, insurance premiums and commissions, and you avoid millions of dollars in taxes you would otherwise pay.
For the professional advisors, it’s good work if you can get it. But the underlying legal policy of the death tax makes little to no sense.
This crazy-quilt of laws and regulations, with its dubious policy objectives and paternalistic advocates who can afford to opt out of the system, exists all for the sake of collecting less than 0.4 percent of total federal tax receipts.
As Warren Buffett would say — at least when his own money is at issue — the private sector would “do a better job with lower administrative costs and better selection of beneficiaries than the government.”
Time to put the death tax where it belongs: six feet under.
Gayle Trotter is general counsel of the Independent Women’s Forum. Her comments are made in her personal capacity and are not intended to represent IWF’s views.