The death tax: Warren and me

By Wes Vernon

I don't want to die in 2010. I would hope to be around a long time after that. But I don't want to die for the IRS or for Warren Buffett. Huh? Read on, I'll explain. There's big money in keeping the death tax.

But the way the death tax law is written, if I want to pass on to my spouse and my kids the results of all the long hours and road trips, and moving from one end of the country to the other over the years in pursuit of feeding the family and building toward retirement, 2010 is the year I will have to die. Otherwise, the IRS will be standing by with its hand out before my grieving family can touch the money.

Never mind that for years, the IRS (and state and local taxers as well) reached out and snatched up gobs of my hard-earned cash before I got to see any of it.

As indicated above, this whole thing is getting personal — not just for little old me, but for you and everyone in the country who owns a home — to say nothing of small family farm or a business.

As explained in a previous column, left-wingers on Capitol Hill forced President Bush in 2001 to compromise and phase out the inheritance tax over several years, with a proviso that once it fades out completely in the year 2010, it will pop up again at the previous full rate in 2011. So if you don't want your kids to be forced to sell the home they grew up in, 2010 is the year to die. The president wanted to kill it for good. Still does.

If you wait and die in 2011, Warren Buffett and the IRS will thank you.

Warren Buffett? What's he got to do with it? Nancy Pelosi says repealing the Death Tax is "reverse Robin Hood." And isn't Pelosi, the House Minority Leader, amongst those good warm-hearted humanitarian liberals who warn us against the evil "rich"? And isn't Warren Buffett the world's second richest man? You mean the fact that he can't keep up with Bill Gates makes him a charity case?

Liberal columnist Mark Shields has cited Buffett as a rare "good CEO." Ditto John Kerry, whose failed bid for the presidency last year cited Buffet's opposition to Death Tax repeal as an example of the mogul's civic minded concern for the common good, even though "he just got a bonanza."

But it turns out Buffett has a financial interest in keeping the Death Tax on the books. For that, we are indebted to the research of Dick Patten's American Family Business Institute (AFBI) and by the Competitive Enterprise Institute's John Berlau, whose intrepid pursuit of facts made him one of the most tenacious reporters in Washington during his stints with Investor's business Daily and Insight magazine. Last year, he imparted some interesting tid-bits on Warren Buffett for National Review Online.

Buffet is the biggest stockholder in Berkshire Hathaway. He benefits from what Berlau calls "the destructive impact of the estate tax" which forces the grieving families of deceased breadwinners to sell off the property just to pay this pernicious tax whose class hatred motivation is to punish the kids whose parents had the foresight to plan for their future.

The heirs have nine months in which to pay the Death Tax. While under the gun of that time limit, they are often forced to sell property of the deceased at fire sale rates. Berkshire Hathaway is in the business of playing the role of a more than willing buyer. The company scoops up property at below market value, and then takes its time to sell it at a tidy profit.

Hmmm. Does this sound like "Robin Hood in Reverse?"

Mr. Buffett is also in the insurance business and, according to research by AFBI, one purpose of his operation is to sell insurance to enable people to pay the Death Tax.

So it appears that if the Death Tax goes away, Mr. Buffett loses in two ways. Fewer people will be willing to buy Death Tax insurance (if that's the right name for it), and fewer heirs will be willing to sell homes or small farms to his holding company. Kerry had one thing right about Buffett: "He's got a bonanza."

Good humanitarian cause. Right? Buffett has said we should not get rid of the Death Tax because that would be like "choosing the 2020 Olympic team by picking the eldest sons of the Gold Medal winners in the 2000 Olympics." Better that the money should go to needy causes such as Berkshire Hathaway.

Now as to the politics of all this: Believe it or not, Senate liberals actually are set to impose a filibuster against the repeal of the Death Tax. The tax is so unpopular; one wonders why they would choose this as a "hill to die on," as they say. Who knows? A feeling of indebtedness to the likes of Buffett or Moveon.org? Or perhaps a maniacal fear of money in the hands of taxpayers instead of government bureaucrats? Who knows? But there it is.

They might want to revisit the lesson of last year's Senate campaign in South Dakota. Democrat Tom Daschle thought he good pull the wool over the eyes of the folks back home even though he liked the Death Tax. 84% of South Dakotans had a different view. Daschle is now an ex-Senator. Even though the race was close, his defeat was notable, given that he was the Senate's top Democrat. His support for the Death Tax played a role.

Perhaps other Senate liberals have a death wish. They know homeowners (57% of Americans) and other property owners will be watching. But if they're willing to follow the radical Left over the cliff of class hatred, that's their decision.

But I don't want to die in 2010. That brings the issue down to a very personal level for me — and millions of other Americans.

Michael Moore, the foul-mouthed agitator who produced a movie last fall whose undisguised aim was to bring down President Bush, burst on the scene years ago with the movie "Roger and Me." Moore, of course, starred himself in a flick whose whole "plot" was about his following General Motors Chairman Roger Smith and badgering him to explain a business decision that supposedly would make Flint, Michigan "a ghost town."

The whole movie centered on his effort to interview Smith. Of course, he would decide how to frame the questions and what to leave on the cutting room floor.

Maybe I should do a movie chasing Warren Buffett around the world with a demand that he explain what he's got against the millions of homeowners in America or the small family farmers in South Dakota or a newsstand operator in Brooklyn or an independent diner-restaurant owner on Main Street, USA. Why should Buffett and the IRS pick up the pieces while these Americans — whose earnings had already been taxed through one or more previous tax cycles — are forced to cough up more after they meet their rewards?

Such an undertaking would require that one has the desire to go through with it (I don't), or have the financial backing to try making a general distribution movie (Don't have it, don't want it), or put the rest of my life on hold (I won't), or have Moore's ego (I should hope not) or his personality (God forbid!).

But surely, one can fantasize. Maybe an original title: "Warren and Me."

Time is running short. You might want to contact your senators, but you'll have to do it soon. They need to hear from you. There's big money in keeping the Death Tax.

© Wes Vernon