The Rising Influence of Rising Affluence

[10nisman]

Warren Buffett and Berkshire are specialists at federal tax avoidance. Even when they owe something it goes in the deferred column. Every donation from Warren is in stock so he'll never ever have to pay capital gains. Also They would never spend capital for expansion without tax breaks.

I don't understand the criticism of Berkshire or Warren. Warren is donating his shares of Berkshire to the Gates Foundation, charities of his kids, etc. Warren has committed that he will donate the vast majority of his wealth to these charities and thus no one from the Buffett family will be inheriting his billions. He's not doing anything out of the norm --- tens of thousands of people every year donate stock to charities and I would expect most have very low tax basis in the stock. Not sure why Warren doing this is a concern or an issue.

Also, Berkshire like the rest of decently run companies around the world pay the amount of tax they are owed based on the rules of the law. He's never said anyone should do anything differently. What he has criticized are special tax treatments for doing the same work under different legal entity structures --- i.e., Hedge Fund / Private Equity receiving favorable carried interest rates vs. someone doing the same work at Berkshire having to pay regular (unfavorable) tax rates.

The increase in the death tax only impacts the very wealthy and they all use complex tax planning to get around the tax anyways. The benefit of raising the death tax rate results in encouraging the very wealthy to do good with their money --- invest in charitable doings vs. giving their kids a boatload of money they did nothing to earn (i.e., Trump, Hilton, etc.).

- 10nis