Why Warren Buffett Supports Higher Taxes

on Thursday, September 1, 2011

Buffett has spoken in the past about the benefits of a death tax, and has said that he thinks the death tax should be 100%. It just so happens that a 100% death tax would be one of the most profitable changes in American law for Mr. Buffett.

Berkshire Hathaway owns owns six life insurance companies. Life insurance companies make a good portion of their income by helping wealthy people shelter their income from the death tax. They can do this because insurance payouts are not considered part of an estate and are paid tax-free to heirs. So Buffett's job is to accept a wealthy man's money and agree to pay it all back to his family upon his death, for a fee.

Buffett also profits from a high death tax by purchasing family businesses at fire-sale prices upon the death of the owner. If the family must pay a 55% death tax on the estate, based on the value of the business, they become desperate to sell (the taxes must be paid within one year of death) and Buffett is right there waiting.

So far he has purchased many companies because of the death tax, including: Star Furniture, Borsheim, Ben Bridge Jewelers, U.S. Liability, NetJets, R.C. Wiley, Flight Safety and Nebraska Furniture Mart.

So the bigger the death tax, the richer Buffett becomes; benefiting from the front end (before death) and the backend for those who fail to pay his companies the appropriate protection money. Either way, a rich business owner needs Mr. Buffett's help, and the bigger the death tax becomes, the easier it becomes for the Oracle of Omaha to rape and pillage the innocent families of dead men.

Perhaps we should take comfort in knowing that he isn't alone; life insurers spend about $10 million per month lobbying in favor of the death tax.