WARREN BUFFETT IS CONSISTENT

He's talked about class warfare before and is still concerned about economic justice and so is Bill Gates.

Buffett Says Estate-Tax Repeal Would Benefit Richest (Update5)
By Alison Fitzgerald and Ryan J. Donmoyer


Nov. 14 (Bloomberg) -- Warren Buffett called on Congress to maintain the estate tax, saying that plans to repeal the levy would benefit a handful of the richest American families and widen U.S. income disparity.

Buffett, the billionaire chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., told the Senate Finance Committee that advocates of repeal were ``dead wrong'' to call the levy a ``death tax.''

It would be more appropriate to call it a ``death present,'' said Buffett, 77, who is the third-richest person in the world, according to Forbes Magazine. ``A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy.'' Heirs to vast fortunes, he said, have already won the ``ovarian lottery'' and shouldn't be further rewarded by the tax system.

Buffett said that in the last 20 years, tax laws have allowed the ``super-rich'' to get richer.

``Tax-law changes have benefited this group, including me, in a huge way,'' he said. ``During that time the average American went exactly nowhere on the economic scale: He's been on a treadmill while the super rich have been on a spaceship.''

Buffett urged the committee to keep the estate tax in some form and to use the $24 billion it raises to give a $1,000 tax rebate to low-income households.

``We need to raise about 20 percent of GDP to fund the programs the American people want from the federal government,'' he said. ``Further shifting this burden away from the super-rich is not the way to go.''

He said that if he had his ``druthers,'' the tax code would be restructured to remove some of the burden from households earning less than $20,000 a year. Those households pay a 15.3 percent Social Security and Medicare tax, he said, while top money managers at hedge funds and private-equity firms pay a 15 percent rate on most capital gains, dividends, and profits they earn.

``I can't imagine a tougher problem than living in the United States and having a $20,000 income and having $3,000 taken out of that,'' Buffett said.

Weighing in on another tax issue being debated in Congress, he said he favored increasing the tax rate on so-called carried interest, the compensation that executives at buyout and venture- capital firms, as well as real estate partnerships, receive for investment services. Carried interest is currently taxed at the 15 percent capital-gains rate. The House passed a measure last week that would require it to be taxed as income, at rates as high as 37.9 percent.

Other billionaires have joined Buffett in urging Congress to keep the estate tax, including Bill Gates, the world's richest man and founder of Microsoft Corp. Gates told a Senate panel in March that he agrees with his father, William H. Gates Jr., who wrote a book in support of the estate tax.

George Soros, a billionaire investor, has joined Buffett in signing a petition sponsored by an activist group called Responsible Wealth that calls on lawmakers to preserve the tax. More than 2,000 people whose estates would be subject to the tax have signed the petition, according to the group's Web site.