Bill Gates and the like want the Death Tax status quo
Remember the death tax? That's what it is. The official name in bureaucratese is Federal Estate and Gift Tax and Generation Skipping Transfer Tax - no kidding. At the office of 60Plus.org, a fine organization, anyone referring to the death tax by its official name gets fined $1. Jim Martin, the head of 60Plus.org named the death tax, sometimes known as the inheritance tax, and he describes it perfectly.
Mr. Martin, the man who gave George W. Bush his first political job in Florida's 1968 U.S. Senate race, says, "It's all in the marketing." Isn't everything?
One person who loves the onerous death tax and never wants to see it disappear is the Omaha socialist investment billionaire Warren Buffett. Dick Patten, writing in Human Events July 17, 2006 edition, says Warren Buffett's "Vulture Capitalism" depends on the death tax to make his takeover techniques work. The takeover generally occurs at dirt-cheap prices, thanks to the present tax laws.
Since life insurance policies are tax-free, many family business owners and farmers use them as the most commonly available tax loophole to avoid the consequences of the death tax. Mr. Patten says, "As an industry, life insurance companies make $12 billion a year off the tax and have fought tooth and nail to keep it in place." Not only the insurance companies but also scavenging investors such as Buffett profit handsomely from punitive taxation.
“They'd rather pay the financial thugs in the insurance industry than see their business torched by the much more dangerous thugs at the IRS," says Mr. Patten, who maintains that the huge payments on these policies could be better used to grow the family company instead of being paid to the insurance carrier. Of course, they could, and should. He estimates the cost of keeping the death tax in effect at 240,000 new jobs each year, because of stunted growth of the businesses involved." Buffett has bought numerous companies forced to sell because of the death tax, including Dairy Queen, Star Furniture and Ben Bridge Jewelers.
Gobbling up these investments is the equivalent of a vulture scavenging a corpse. Berkshire Hathaway is benefiting directly from the misfortune of others," says Mr. Patten, who has spent the past 25 years fighting the death tax. Yes, there is a lot more to Buffett than just a value-oriented investor who buys undervalued stocks. He stands ready to pounce on businesses the owners are eager to sell because of the tax consequences of holding on too long. That is the real secret of his success.
This is why we saw a concerted effort by America's elite leftwing billionaires a couple of years ago to keep the beneficial (to them) tax in place. When George W. Bush sought to repeal the tax Buffett, George Soros, Bill Gates, and even Bill Gates, Sr., the father of the inventor, were eager to speak out for the status quo, the status quo, regarding the tax. Of course, they were careful not to tell the real reasons for their support of the death tax's retention. Many Americans expressed surprise at the time that these men were so interested in what seemed to be a mundane tax issue. They have been conditioned for years to think businessmen are all conservative Republicans. This is one of the biggest myths in the political system. The far-left Buffett held fundraisers in Omaha for Hillary Clinton's 2000 Senate campaign. The media said little about this, naturally.
"Even as Buffett's insurance companies are 'protecting' family businesses from the IRS, he is buying companies from families forced to sell to pay the death tax. Nothing produces families desperate to sell their businesses like a 55% bill from the IRS on all of the businesses' assets," adds Mr. Patten.
You will notice that writers in America's "respected" mainstream business publications are very careful not to mention any of this and always write fluff puff stories about Buffett. We hear endless tales of the folksy "Oracle of Omaha" and his investment acumen but never any of the unpleasant stories we have just described. His dark side escapes any critical examination. Why? Do they not owe it to their readers to tell them the truth? On the other hand, maybe it's just the old story of America's establishment liberals and hangers-on looking out for their own.