Warren Buffett on Giving it Away

FORTUNE Magazine: Warren Buffett gives away his fortune – Jun. 25, 2006: Well hats off to Warren Buffett who is using his considerable wealth to make a difference in the world. Today Buffett pledged to give away $37 billion of stock at today’s value to the Bill and Melinda Gates Foundation. This is really great to see and is the proper role that true wealth ought to play in our society. This also, according to CNNMoney, may be the largest single philanthropic gift ever given.

And so Bill and Warren are great examples of how the wealthiest in our country ought to spend their wealth in the end. But where are the rest of the Forbes 500? Where are the rest of the world’s wealthiest on giving things away?

One way to ensure that more of this money be given away is to continue to increase the estate tax. The estate tax probably has the least detrimental impact above a certain level towards the overall welfare and benefit of our society.

Personally I believe that their ought to be a much greater incentive for wealthy Americans to give their money away. I think that the estate tax on estates over $50 million ought to be 100%. Why over $50 million? Because I believe that $25 million (what would be left assuming the first $50 million being at 50%) is more than enough money to leave your children and heirs to live out their life in relative comfort. And while they may not be able to own and fly the private jets that their parents did, they still would more than likely have as comfortable a life as possible. If they were wise stewards of the $25 million left they could also certainly increase these dollars during their life as well ensuring that their children and future generations were also well cared for.

The cost on our society for the wealthiest of the wealthy losing the ability to pass on more than $25 million or so peronally would not be that great. The benefit on the other hand would be enormous. And it would absolutely encourage others to follow in the footsteps of Gates and Buffett in using their vast wealth for the benefit of a much greater group of people on this earth.

Thank you Warren Buffett for this kind gift to the world today and for helping set an example of the right behavior for the billionaire.

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18 Comments

  1. Phil says:

    I’d like to thank Bono for helping shine an amazing light.

    He has done more to bring awareness to those who need to know than any dollar figure can back.

    One direct influence, Warren Buffet.

    Then again, I am biased… being a U2 fan and all.

  2. Jim says:

    What’s your justification for giving the government the right to take away large portions of a person’s life saving? Honestly Thomas it’s not the government’s money to take in the first place. The process should be voluntary, not forced. There’s absolutely nothing in the Constitution dictating the government has a right to people’s savings after they die. If your going to take this stance, at least take the higher road and change the estate tax to a forced non-profit contribution tax.

  3. Anonymous says:

    I always find it amazing that someone can just pick a number and say that is “fair”. Maybe we should also put a 100% income tax on everything over $30k because in Montana you can live fine on it. As for estate tax, the wealthy easily work around this anyway. That estate tax doesn’t go to any particular cause either – how would you feel about it all being put to military spending?

  4. bbebop says:

    100 percent seems a bit punitive, but 85 percent (the “Warren Buffet rule”) is perfect!

  5. John Koontz says:

    Out of the number of problems with such an idea, the one I’d like to point out is the lack of incentive to make more than $50 million. You put this law into place and no one makes more than $50 million. It doesn’t lead to any more giving. It would probably lead to LESS charitable giving because there would be less people with $50+ million to give.

  6. Anonymous says:

    I agree with Jim on this one, why do we need the government to step in and take away a person’s money? Why would we want to punish someone who wants to pass on their money for their kids, for generations to come. Just what we need, another tax on the ‘evil rich’? I think what Warren Buffet and Bill and Melinda Gates are doing, is great, but do we need a tax in order to ‘force’ people into that style of thinking? No. It’s their money, they earned it, let them do as they pleased with it.

  7. Anonymous says:

    What a horrible idea. Maybe the government should take away your camera after the first 5000 shots. Clearly no one would need to take more than 5000 photos with any one camera, and think of all the poor photography students with no camera at all!

    The government is here to protect its citizens. Its goal is not to ensure even distribution of wealth. Its goal is not to foist one person’s idea of “fairness” on others. And its goal is certainly not to provide a disincentive for people to make money.

    I love your photography Thomas, but the wacky politics I could do without.

    -Brad C.

  8. Shaun says:

    I believe the real answer lies not in taxation but in education.

    There are numerous estate planning approaches that allow the wealthy to pass all or most of their wealth to their heirs while supporting charities… i.e. buy second-to-die insurance on the husband and wife equal to the amount they want the heirs to have and then donate all assets to charity, and the best part is the government gets no direct tax revenue.
    It’s a simple strategy that very few people realize is even possible.

  9. Anonymous says:

    Imposing a 100% estate tax on everything in an estate over $50,000,000 would not be the government taking any person’s money from them. Since the money is in an estate, the person is dead. You can’t take it with you.

    Furthermore, I doubt that many people capable and desirous of acquiring more than $50,000,000 would be deterred from doing so because of an estate tax. There are plenty of billionaires around despite the current estate tax. But if a 100% tax on amounts over $50,000,000 would deter CEOs, CFOs, etc., from amassing huge fortunes by paying themselves salaries more than 400 times higher than what they pay their employees, corporations might begin paying their employees a living wage. That would be a good thing.

  10. Anonymous says:

    IMPOSING an estate tax is not “encouraging” someone to give to charity. Its forcing them to pay ANOTHER tax! Educating someone of the value of what their generosity could do for a cause is “encouraging”. An Estate is not the gov’ts $$$. Why should they have control over it? Is this China? Mexico? Cuba? No, this is the U.S.A. where capitalism is alive and well, where people can make thousands, millions, and even billions of dollars, and have the ability, generosity, and CHOICE to donate their time, talents, and MONEY to a great cause/charity if they so CHOOSE-good grief, please don’t speak of such un-American, ill-thought ideas. There are too many people in Public office already, that have lost their bearing on what it means to be good stewards of the money they ALREADY have of ours! Give. me. a. break.
    My hats off to ANYONE that is willing to volunteer their time to a good cause, their talent in whatever capacity to a good cause, and yes, even those that give money. It doesn’t always have to be monetary…almost everyone can volunteer their time-maybe the gov’t could impose a volunteer tax for everyone-now that would make some changes in our country! Maybe parents would be forced to volunteer some time and spend that volunteer time with their children, read to them, nourishing them, teaching them morals and values, showing them the important things in life. And maybe volunteer with under-priveleged children on occassion? Gee, if everybody actually did this…Do you think we would actually need a Bill Gates “education” foundation? Why punish (tax) a select few for working hard and being successful, when we could all chip in for the cause?

  11. Anonymous says:

    Bill Gates never gave a cent away until people started calling him the Devil and creating online Bill Gates wealth clocks, etc. He’s not giving money away because he actually wants to, but because others have told him to and it’s good PR.

  12. Anonymous says:

    Bill Gates said he’d give away his wealth on his time table. Who are you to say when or even if he was to do something with his money? I am so amazed that think they are open-minded liberals are, in fact, incredibly closed minded. It’s such a shame that efforts like this are met with such animosity.

  13. David says:

    Your estate tax tax idea is an uninformed one – our economy would collapse as any small business with a valuation over $50m would be unable to survive beyond one generation. It’s honestly not as hard as you would think for the IRS to come up with a $50m valuation on a successful, ongoing business – and remember, it’s the IRS’s opinion of value that they’re going to tax you on, not yours. Small businesses represent 50% of all private-sector jobs in the US – they’re completely needed.

    I think you see a $50m estate and think “guy with $50m in the bank.” That’s not true. The $50m usually is almost entirely non-liquid. So if his heir has to pay $25m in tax, they have to liquidate the company, the family house, everything to pay that tax bill.

    I’m not a multi-millionaire, I just have experience in dealing with these issues. So please, think through the ramifications of an opinion like this. It’s just not a viable one. Thanks,

    -David

  14. Anonymous says:

    I think Jill Greenberg should give %100 percent of her profits to organizations that fight child abuse…

    … but that’s just my opinion.

  15. Anonymous says:

    I think Jill Greenberg should give %100 percent of her profits to organizations that fight child abuse…

    … but that’s just my opinion.

  16. Scott says:

    “I think that the estate tax on estates over $50 million ought to be 100%. Why over $50 million? Because I believe that $25 million (what would be left assuming the first $50 million being at 50%) is more than enough money to leave your children and heirs to live out their life in relative comfort.”

    I’m no accountant, but wouldn’t a 100% tax on $51 million be $51 million?

  17. Anonymous says:

    Another big problem with this is we’re not actually talking cash reserves. If someone starts a business that is worth $50 million and they have $5 million in cash what happens when they die under this idea? Their family has to sell the business in order to pay the taxes on it! That is absolutely crazy!

  18. Anonymous says:

    I plead for a retraction by Mr. Thomas Hawk himself. The concept of A 100% estate tax for the “wealthy” is ludicrous…(BTW we are all INCREDIBLY wealthy if viewed by a world standard). So why don’t we make the 100% estate tax @ $50,000? Hawk’s idea is right up there with… Al Gore invented the internet! Dumb and Dumberer. I think you would have been better off leaving your hair-brained politics at the door, instead of your blog. Maybe write a commentary for a newspaper-you would fit right, I mean, fit “left” in! Ah! Socialism-Ode to yo Playa!