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Related Topics Buffett and Taxes
http://www.futureofcapitalism.com/2011/07/buffett-and-taxes
The Wall Street Journal's Stephen Moore has a piece under the headline "Warren Buffett Is Wrong On Taxes." Great piece, but even Mr. Moore overstates the taxes that Mr. Buffett will pay. Mr. Moore writes:
Mr. Moore doesn't mention anywhere in the piece that Mr. Buffett has pledged a huge portion of that $38 billion to the Bill and Melinda Gates Foundation. When you donate appreciated stock to a charity, you avoid the capital gains tax. I believe one can also avoid the capital gains tax at death under the estate tax by getting a step-up in basis, but then your estate (in essence, your heirs) has to pay the estate tax. In other words, Mr. Buffett may well manage not to pay a capital gains tax on that "income." This point doesn't necessarily undermine Mr. Moore's argument that Mr. Buffett has a higher tax rate than his secretary. If Mr. Buffett's secretary wanted to donate appreciated stock to a charity, her capital gains tax on it would be the same as Mr. Buffett's — zero. What it does tend to undermine is Mr. Buffett's argument that he should pay more taxes. If he wanted to, he could. But he has chosen to organize his affairs so as to minimize his taxes, figuring that he (and Bill and Melinda Gates) are better at allocating capital than the politicians in Washington are. by Ira Stoll | Jul 27, 2011 at 9:03 pm Related Topics: Press, Taxes, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list Reader comments on this item
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