Here we go again. Warren Buffet takes to the pages of the NYT to explain why the richest Americans need to be taxed more. Here’s the summary of the Buffet tax plan:
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
And after you read Buffet, read Stephen Moore who wrote in the WSJ a few days ago on how Buffet’s calculation of what he’s paid in taxes understates the truth. Moore writes:
Mr. Buffett owns about one-quarter of his investment company Berkshire Hathaway, and his shares are worth about $38 billion. This wealth is mostly stored in what are technically called “unrealized capital gains.” Eventually when those gains are converted into income, he will pay a capital gains tax
One thing Moore does miss, however, is how Buffet is treating the taxes owed on his estate when he dies. Buffet has committed the bulk of his fortune – these billions of dollars in unrealized capital gains to the Bill and Melinda Gates foundation, among other foundations, upon his death. And donations of this sort, unless I’m missing something, effectively take the assets out of Buffet’s estate when calculating the deceased’s estate tax burden.
As Moore notes, other than Buffet’s proclamations, we don’t know what his income-tax return looks like. One, he should make that public. And two, he should let us know how he’s structured his gifts to these various foundations. If Buffet is such a great believer in the government’s ability to use tax money, then he shouldn’t have any problem having the Treasury tax his estate prior to the money arriving at the various foundations of his choice.