I’ve been thinking about what to say about the huge debate about Warren Buffet’s comments that his taxes are too low. First, let me say that Mr. Buffet may well be the most brilliant investor alive on the planet. Now let me get to the real point I wanted to make. Mr. Buffet has made the decision to donate most of his fortune to charity. Together with Bill Gates, he has persuaded a who’s who list of rich people to donate at least half of their fortunes to charity. Either of these two things has done more to make the United States a better country than any amount of taxes he could pay. Given the size of his fortune, Mr. Buffet’s lifestyle is relatively modest. If Mr. Buffet were to pay more taxes, ultimately that would mean he would donate less to charity. I certainly don’t believe Mr. Buffet is infallible, but I believe that every time Mr. Buffet donates a dollar to charity more good is done than would be done by his paying another dollar in taxes to the government.
At the same time Mr. Buffet is complaining that his tax bill is too low, his company, Berkshire Hathaway, is debating its tax bill with the IRS. The two parties are debating a billion dollars in taxes. Is Mr. Buffet a hypocrite? No, he understands how politics is done in the United States. He is speaking in support of the President’s proposals to tax the rich more heavily in the hopes the President will intervene with the IRS on behalf of his company.
Several other people in the blogosphere have already made the point that Mr. Buffet supported the restoration of the Estate Tax because 10% of Mr. Buffet’s life insurance business is estate planning, and the Estate Tax will not affect him because he has already decided to donate his fortune to charity.