Warren Buffet...Again?

Sorry folks, I usually like to diversify my observations and thoughts. But, as I have learned during my studies, we must speak truth to power and Mr. Buffett is a very powerful man. Grover Norquist, a bit of a crank, has written an article overviewing how Mr Buffett has accumulated much of his wealth. While I think most of his wealth was accumulated through prudent and informed investing, I was troubled to see Mr. Buffett profitted off of the oppressive estate tax system in the US. Until recently, modest small busisnesses, where the owner has died, bore the brunt of this tax burden as asset value rarely equals available cash to pay the death tax. This forced heirs to sell businesses that benefitted the communities in which they were located, sometimes for decades. Not only do you have capital leaving a community, but a loss of jobs would be a standard outcome as well.

Buffett is pressing for a reinstatement of the death tax. While I understand his hesitancy to create an aristocracy through inheritance, I chafe at the heavy-handed use of tax laws to go after those we don't like. A prime example is the Alternative Minimum Tax (AMT) in the US. Upon its creation, the tax targetted 155 'super-rich' people in the USA. In 2005, 4,045,459 tax payers were subject to the AMT. Most of these people are average middle class families not the 'super-rich.' This is why I have trouble with an estate tax. While designed to tax only people like the Buffetts, Kennedys, Feinsteins, Gates, etc, it inevitably reaches down to the small business owners who employ 75% of the country's workforce. When the tax receipts start to roll in, congress conveniently forgets to index the taxable threshold. Thus, the law becomes a form of injustice and oppression as businesses are forced to sell (to Buffett no less) at firesale prices.

Just a reminder, every tax law is legally enforcible at the point of a government employee's gun.