Mr Buffett and Mr. Gates openly lobby others who have amassed great wealth to avoid capital gains taxes and inheritance taxes by donating to a foundation. They also freely espouse paying higher taxes is not only necessary, but the right thing to do... Am I the only one who sees this as an oxymoron?
In Nebraska, Buffett's capital gains taxes @ 7% of $Billion would produce $70Million in revenue and make up much of our budget shortfall.
After capital gains and later, death taxes are paid, foundation donors can still fund their charities only using after tax dollars. Better yet, research promising new industries in the US and fund them. The Bloom box, only one idea, creates electricity using 1/2 the fuel of current methods and is smaller than a dumpster. Americans are full of ideas and have literally changed the world. Investing creates jobs, grows the economy and teaches folks how to 'fish' rather than feeding them for a day. Risk means some winners and some losers, but many jobs.
By shielding their wealth, their dividends and real estate from the tax man, they should know the result is selfishly leaving the rest of us to make up the difference. Isn't the removal of billions from our struggling economy also a problem? Although I have no doubt their goals are unselfish, possibly they haven't thought through the "unseen" [Bastiat] lost benefits of added production, growth in the economy, job creation and worker independence that could have developed.
Mr. Buffett and Mr. Gates, the least you can do is offer to drop your Foundation's tax exempt status to show you are sincere and do desire to pay a fair share of taxes.
Sent to the hill on 12/17/10
Not matter how philanthropic these two billionaires seem lately their whole careers were based on the protection of accumulated wealth.
ReplyDeleteAlthough in some cases Foundations can do a lot of good, one must always remember that it was the only way for them to keep control over their money, while getting rid of their social responsibility of paying taxes on it. These billionaires are making sure that their decedents will not only receive hefty salaries, from being on the boards, but also guaranteeing the prestige of being in control of whom might benefit from it.
Those who would wield this power to select or deny recipients, to distribute foundation monies to, could still influence political decisions that may effect other core business profitability, thus continuing to distort decisions to leverage favor, even though technically the money is not theirs.
So although on the surface it may appear as charity and done for all the right reasons, it really is a business decision to not relinquish control or allow a greater portion of it to go back into the public coffers.
Basically it is job security in perpetuity for some members of the principles family and a powerful tool to use at will.
"Mr Buffett and Mr. Gates openly lobby others who have amassed great wealth to avoid capital gains taxes and inheritance taxes by donating to a foundation."
ReplyDeleteIs that true? Where'd you get that?
JFranklin
ReplyDelete"Gates, Buffett Lobby the Rich for Donation Pledges" http://abcnews.go.com/Technology/wireStory?id=10937199
Thanks for the link. I would guess that funds that are donated in that way are deductible from the value of estates before they're taxed, right? So, any amounts given away would reduce the amount of estate taxes due. If you started with an estate of $1B, gave half to a foundation, then the estate tax would be 35% of $500M, or 175M. Whereas if you didn't donate, the estate tax would be 35% of $1B or 350M.
ReplyDeleteEither way, it seems better than having the kids inherit it all tax-free. But I'm a dirty hippie liberal, so what do I know?