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Billionaries fight estate tax repeal

Billionaire Warren Buffet, one of the world's richest men who, critics note, will personally avoid the payment of most or all death taxes on his estate by giving most of it away to charity, went to Congress today to encourage Democrats to retain the estate tax, against the wishes of the Bush Administration and small business groups:

Billionaire investor Warren Buffett urged senators Wednesday to reject calls by the Bush administration and business groups to permanently repeal the estate tax.

"A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy," Buffett, the chairman of Berkshire Hathaway told the Senate Finance Committee.

Buffett has long opposed efforts to repeal the tax.

Under the tax-cut package signed by President Bush in 2001, the exemption on the estate tax increases each year, culminating in full repeal in 2010. But the legislation expires at the end of 2010, and estate tax levels return to their pre-2001 levels -- a top tax rate of 55% on inheritances of more than $1 million -- in 2011.

Senate Finance Committee Chairman Max Baucus, D-Mont., said he supports full repeal, but that such a measure doesn't have adequate support. Baucus, noting that less than 1% of families are now subject to the tax, urged lawmakers and others to craft measures designed to exempt most family-owned farms and small businesses.
Sen. Charles Grassley of Iowa, the committee's senior Republican, repeated a call for full repeal.

Grassley said the prospect of family members being forced to sell a business to meet a tax bill shows that the estate tax is fatally flawed from a technical standpoint.
"Instead of the free market determining when assets are bought or sold, the death tax makes that determination," Grassley said....

Buffett urges Senate to oppose estate-tax repeal, CBS Marketwatch, November 14, 2007

Full post as published by California Business Law Blog on November 14, 2007 (boomark / email).