Buffet's Piece of Mischief

Thanksgiving began the holiday season, a time when Americans show gratitude for all the unique blessings of our country, including the odd phenomenon of financial savants who in commonsensical matters behave like prize idiots.  From John D. Rockefeller to William Randolph Hearst to Joe Kennedy to Ross Perot to George Soros, this is a tradition of long, if twisted, standing.  The newest entrant to the billionaire boob sweepstakes is Warren Buffett, who came to the Capitol two weeks ago to testify against abolishing the estate tax.  Not only should your life’s fortune be stripped of most accrual past the $2 million mark, but the revenue should then be distributed to the bottom rung of the middle class at a thousand a pop.

Otherwise, quoth the oracle of Omaha, our society will topple over the brink into a dynastic society, where a locked-in upper crust will lock out young strivers, leaving them with mere crumbs.  In the last decade or so, he maintains, the folks at mid-ladder have gotten their boots stuck in the caulk while the highest rung has been rising heavenward.  “An explosion of wealth,” Warren explained to the antiwar types who run the Congress, who are opposed on principle to anything exploding.

Now this is not an issue that impacts upon my pocketbook.  Unless a drastic uptick in the salaries of magazine writers propels my asset base into the stratosphere, neither I nor any long-lost uncles show any current predisposition toward leaving multimillion-dollar legacies.  So I can bring total objectivity to the proposition that Buffett is a dunce in matters social, political and moral.  Nor is he alone: he brought with him a petition signed by many of the wealthiest people in the land, in support of his testimony.

The effluence of affluence, one might say.  This really stinks.  Let us count the ways.

First, even if there is some public policy virtue to be achieved by depriving heirs of their inheritance, the state has no moral right to the money.

Second, by extracting it from the possession of a person who has duly earned it, an act of theft is occurring.  The degree of overriding public interest required to overwhelm the justly acquired ownership is enormous.  Taking it to save the nation in time of war is defensible; taking it to satisfy abstract notions of equality is not.

Third, taking the money is an attack against property as a basic right within humanity at large and that polity in particular.  When the United States puts its hand in a citizen’s pocket, they shrink the power of the citizen to have a pocket.

Fourth, taking large sums that are capable of creating great ventures and dispersing them into small paydays that end up in a supermarket cash register is itself damaging to the society’s economic machinery.  Let that heir set up a huge business with his capital and suddenly you have many new jobs helping people to climb the ladder of success.

Fifth, money in such quantities is not hidden under the bed.  It is in banks or in active investments.  Thus the money is at work for the society and the middle class, giving them home mortgages or paths to employment and profit.  The bank pays a few percent of rent in the form of interest and keeps the money busy in the system.  When the government pulls it out, it essentially disappears into more post offices named after Robert Byrd.

Sixth, this tax actually breaks up existing businesses and family farms, causing loss of jobs and destruction of economic assets.  Structures created by human ingenuity, maintained by hard work, developed by ambition and passion, come tumbling down to give the static entity of the state more dollars for its treasury.

Seventh, not only are resources wasted after the death of their owners, they are depleted in anticipation of that event.  People are forced into all sorts of weird corporations and partnerships, hedges, insurance policies, you name it, all in fear of Uncle Sam’s scythe wreaking havoc later.

All in all, there is no ethical basis to the confiscation and a very thin argument against retained ownership. Which doesn’t nearly outweigh the societal interest in maintaining the integrity of its economic systems.  This tax is a wrecking ball with nothing to recommend it at all.  If Buffett believes what he is saying, he is a fool; if he doesn’t believe it, he is a pretender; in either case, he should exercise humility and keep his nose out of public policy, a field in which he has no more expertise than the Thanksgiving turkey.