Billionaire Warren Buffett urged Congress to preserve the estate tax, saying that plans to repeal it would benefit a handful of the richest American families and turn the country into a “plutocracy.” Buffett, the chairman of Berkshire Hathaway and the second-richest man in America testified before the Senate Finance Committee on Nov. 14, 2007. He told the panel, which is exploring ways to replace the ever-changing rules of the current estate tax system, that advocates of repeal are “dead wrong” to call the tax a “death tax.”
Buffett said it would be more appropriate to call it a “death present” because heirs get to calculate their capital gains on inherited assets based on the price when they inherited them rather than when the decedent originally bought them.
Buffett noted that so few Americans are subject to the estate tax that “you would have to be at 200 funerals to attend one where the decedent paid the tax.”
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
Senators on both sides of the aisle agreed that complete repeal of the estate tax will not happen anytime soon. “I think everyone in this room knows we’re not going to repeal the estate tax. It’s not going to happen in the foreseeable future,” said Committee Chairman Max Baucus (D-MT).
About Evan H Farr, CELA, CAP
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