Gates and Buffett Form Largest Philanthropic Foundation
Written by Brandon on June 27, 2006 – 2:10 am - Welcome, if you're new here, you may want to subscribe to our RSS feed or subscribe to our email newsletter. Thanks for visiting!
In a world where liberals continually attack the rich CEOs and top management of “evil” large corporations who provide jobs for millions of Americans, it is great to see actions like Warren Buffet’s recent gift of $30 billion to the Gates foundation.
The Bill and Melinda Gates Foundation is now the wealthiest and most powerful philanthropic organization on the planet, thanks to a $30 billion gift from investor Warren Buffett.
“It’s a big challenge for us to make sure this money gets used in the right way but one that we’re thrilled about,” Mr. Gates said yesterday at a press conference with his wife, Melinda, and Mr. Buffett at the New York Public Library.
Mr. Buffett is giving 85 percent of his Berkshire Hathaway stock to the Gates Foundation. The remainder will be distributed among foundations in the names of his wife, Susan B. Buffett, who died in 2004, and the couple’s three children. The shares are worth $44 billion.
On a recent trip down to Omaha to visit my girlfriend I saw Mr.Buffett’s house and was surprised and impressed at the comparatively humble way in which he lives. I did however, thoroughly enjoy one of his primary reasons for the large donation:
The billionaire said the money would be better spent by a foundation than by the federal government through taxes on his estate.
Quite the reinforcement for the small government crowd when coming from someone with as sharp of a business and economical acumen as Mr.Buffett.
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Posted in Beyond the Facade, Ministry of Strategery |
June 27th, 2006 at 7:24 am
If Buffett a massive liberal? I’m not sure I’m looking forward to the types of grants this new organization will hand out. Hopefully time will prove me wrong.
June 27th, 2006 at 8:51 am
Maybe if all billionaires were like Buffett and Gates, liberals wouldn’t be so anti-big business. Buffett and Gates are true examples of “from each according to his ability, to each according to his need.” Helping out your fellow man in his time of need — that’s a principle we should be living by. Instead we just bomb our fellow man.
June 27th, 2006 at 9:56 am
The idea that this is a “reinforcement for the small government crowd” would hold a lot more water if both Mr. Buffett and Mr. Gates weren’t high-profile opponents of estate tax repeal, of course.
June 27th, 2006 at 11:35 am
I heard he has made big grants to companies that support using stem cells and such.
Just throwing that out there.
June 27th, 2006 at 11:58 am
Buffett is a liberal who supports the death/estate tax. Oddly enough, this donation means the government will not be able to swallow up 1/2 of Buffett’s “estate” should the death tax come back in 2011.
Is he a hero? Yes, it is a very noble donation. Is this a tax shelter? Absolutely.
People do not get rich by giving 1/2 their money to the government. I am sure Buffett knows this.
June 27th, 2006 at 12:24 pm
Of course it’s a tax shelter, but thats exactly the point I was trying to make. He is contradicting himself by supporting the estate tax while at the same time avoiding it. Rather hypocritical and self defeating if you ask me. Of course many say that Buffett’s interest in preserving the estate tax is also self-motivated because he benefited from it by buying small family businesses crippled by the self same tax.
Mu Socialist-
I am all about gifts to those in need but come now, by each of us working hardest, even with a self interested motive, we are helping the whole. That is the essence of capitalism, the only system proven to work.
June 27th, 2006 at 1:27 pm
Regardless of the politics behind it, this was a humble move. I also read in Newsweek that Bill Gates will be working full-time with his foundation and spending only 20% of the time at Microsoft by mid-2008, just so he can make a bigger difference in the world through his foundation rather than just running a company. I’m glad to know some of the people who have the world’s biggest wallets also have such big hearts.
June 27th, 2006 at 4:28 pm
Brandon,
I challenge you to show 5 examples in the history of the estate tax in which it was recorded that a small business or farm had to shut down operations due to this tax. I want to see a link and everything.
I am from Iowa, a major farm state. Not once, in the history of my state has a family farm or any sort of farm been crippled by the estate tax. I want to see where you get off making this claim that it happens all of the time elsewhere.
All you people advocating absolutely free-market capatilism, lassiez-faire this and that. Ever consider that our system of government provides and protects the economic system that allows people to make their millions? Is it really too much to ask that those who have risen to fabulous heights because of the stability of the American economy might have to contribute a little in return to support the system that benefited them for so long.
June 27th, 2006 at 6:15 pm
A little in return Mr.Whitty? That is ridiculous. The estate tax is well over 50% for most and is on assets such as tractors and land, not just liquid assets such as money in the bank or mutual funds. I will do my best to find testimonials from farms closing but the farmer’s I know that surround the farm my family owns in southwestern Minnesota are proud people that do not like to admit to defeat especially to outsiders.
June 27th, 2006 at 6:31 pm
here is an report by the Congressional Budget Office: Effects of Estate tax on Small Business and Farms
http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf
here is my opinion if anyone cares.
The Estate tax has crippled some farmers Pat. In fact the report states that 5% of the returns a year have insufficient liquid assets to pay the tax. The tax can be quite crippling and frankly, unfair. However, for an estate to be caught by the estate tax is just plain ignorant. There are many deductions for small businesses and farmers as well as many different options to shield the money, aka trusts, charitable orgs, gifts to relatives, etc…. The estate tax is a very effective way to redistribute income throughout the nation (as is communism) but the question is still whether or not that is the government’s job or right. Sure millionaires are grateful for the economic system but should they be so grateful that they have to give 43-47% of their wealth to the system….I don’t want to, I would rather give it to my decedents to ensure a comfortable life for them and their families…and since there are many Marquette students reading this I feel safe making the generalization your parents, and grandparents feel the same.
June 27th, 2006 at 7:47 pm
Brandon, how do you figure that “the estate tax is well over 50% for most”? It is not. At most, it is 55%, but only if you have an estate valued at over 3 mil. Even if your estate is valued at 1 mil. you will pay 41%. Agreed, that is a lot, but that is a steep drop in the rate and certainly isn’t “well over 50% for most.” Check out the rate schedule…
http://www.706accountant.com/estate-tax-rates.htm
Also, when you are searching for examples of farms or small business that have been crippled and forced to shut down, try to find data, not annecdotal evidence. That is simply good scholarship. The reason I challenged you on this is because your claims, and the claims of many estate tax opponents, make it sound like small businesses and farms are consistently being forced to close up shop due to this tax. It is simply not true. You will be unable to find anything that supports your claim, but I wish you luck in trying.
Tax Man, and may i say i am reluctant refering to you as such since i wonder if it does not bely the authority you have on the subject, the point you make by posting that link really supports raising the exemption threshold more that it supports doing away with the tax altogether. Also, the 5% figure cited in the report is simply, as you said, the percent of estates that can’t cover the tax amount with liquid assets. You are right in saying that this is in most cases simply poor financial planning, and I would point out that none of these estates, if business or farm, must close, they simply must liquidate some of their assets.
Tax Man, you also miss the point i was making about the principle of taxing millionaires upon their death. From a pragmatic standpoint, a government must have some form of revenue, and this revenue must come from taxes. In the case of the United States, the government has created a very stable, market friendly environment in which to do business. Why is it unreasonable, or unfair, to think that upon their death a millionaire who has clearly used this system to their advantage should not pay to continue to support this system for others? It is one thing to squabble over the rate of the estate tax, but to challenge its existence is foolish and arrogant. Generations before us have ensured economic stability through hard work, and yes, the payment of taxes, even upon death. Who are estate tax opponents to say that the rich should profit from this system that they did nothing to create without paying their own due?
June 27th, 2006 at 8:14 pm
Once the family pays the capital gains, property sale taxes and sales taxes in general necessary to liquidate enough of the estate to pay the estate tax the total is greater than 50% as I stated. I know Tax Man and he is and accountant who is well versed on the subject, something a polisci major is not. When it comes down to it, the estate tax is a triple tax, not only is the income taxed when earned, but it is tax when assets are sold and again when someone dies. This is hardly fair or decent.
As far as “poor financial planning” goes, how many farmers do you know that can plan appropriately? Those “evil millionaires” will be able to avoid the taxes while the farmers and common men will be stuck with the bill. Hardly the income redistribution you are interested in.
June 27th, 2006 at 10:21 pm
For what it is worth, my dad’s side of the family owned a small/mediium sized farm for 150 years and sold it about about 8 years ago. I’m not sure the reason(s).
June 27th, 2006 at 11:33 pm
Haha…in your haste to put down liberals….you seemed to have overlooked something very important to your crowd. Buffet and his wife have made very large contributions to Planned Parenthood and to stem cell research. Maybe you should look at him as a “good liberal” instead of “a rich man always getting picked on by liberals”.
June 28th, 2006 at 1:49 am
I have no problem with him donating privately to those organizations as an individual, indeed that is his right. I do not choose to donate to those causes, all I ask is that the governement not fund them with my tax dollars. I have made that clear from the beginning.
June 28th, 2006 at 8:16 am
You know, I think our conception of what a million dollars gets is also very skewed. I know to all of us a million dollars sounds like a lot of money right now, but there are more and more millionaires all the times. These days if you want to retire comfortably you need a million bucks.
Second, the estate tax is a tax upon already taxed assets. These people already have paid into the system, Pat, in income or capital gains taxes. Now government wants to take a second pass at the same assets.