Comment: From Thomas Woods Jr. 'Rollback'

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From Thomas Woods Jr. 'Rollback'

Regarding Warren Buffet and Bill Gates positions:

"Big business has also opposed tax cuts or supported tax increases, again contrary to the portrayals of those who imagine businessmen as implacable foes of government intervention. For Example, Bill Gates and Warren Buffett have been portrayed in the media as selfless benefactors for opposing the elimination of the estate tax.  As men of wealth themselves, the media line goes, these men out to favor the abolition of the tax, but instead they have publicly campaigned for its retention.  What men of the people these are!

But there may be more to the Gates/Buffett stance than meets the eye.  For one thing, the estate tax will never hit Microsoft, since, as a publicly held corporation, its owners will never die.  Moreover, if repeal of the estate tax were to be made revenue-neutral, additional taxes to make up the shortfall would very likely fall on corporations.  So if you head large corporations, you might not want to see the estate tax repealed.

A family-owned business, on the other hand, is liable to be devastated by the estate tax.  A son inheriting the family business-whose plant and equipment are worth, say, $2 million-from his father and who has been running the business for five years could be hit with a tax bill of $500,000, and amount he couldn't possibly pay out of the company's annual profits.  He has to sell, and fast.

It so happens than an avid buyer of businesses desperate to sell in the face of a massive estate-tax bill is - surprise! - Warren Buffett. In addition to the Buffalo News, reports investigative journalist Tim Carney, "other motivated sellers facing the estate tax who have found a willing buyer in Warren Buffett [include] Dairy Queen, a Utah furniture store, and a Nebraska jeweler."

Now it could be that Buffett's support of the estate tax has nothing at all to do with self-interest and instead derives from a pristine devotion to egalitarian ideology. But shouldn't some of these facts at least be mentioned in media coverage of Buffett and his pro-tax crusade?"