Warren Buffett has famously campaigned to keep the federal estate taxAn estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs. , but he apparently will avoid the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. himself, despite owning the world’s second largest personal fortune.
That’s because he’s giving most of it away to charities, with the biggest chunk going to the foundation run by Bill Gates, the only guy on the planet with more money than Buffett.
Buffett’s children won’t exactly be out in the cold. They will get to spend many billions of their father’s fortune, but as directors of charitable foundations, not as individuals. All of these gifts are announced in letters posted on the Berkshire Hathaway website, each with a condition that the gifts be treated in a way that will keep them tax-exempt.
Kim-Mai Cutler of the Boston Globe has a good article quoting Buffett’s unapologetic defense of the tax he won’t pay.
Advocates of estate tax repeal were cynical but not surprised by the announcement that Buffett would avoid the tax that he has helped protect. They have long contended that the largest fortunes usually escape the so-called death tax. Meanwhile, less tax-savvy businessmen, usually owners of small, newly successful firms, get socked by it because they haven’t had the time or inclinations to do expensive estate tax planning.
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