Walton GRAT and Jackie O. Trust
Bloomberg News has an article reporting on estate-tax-reduction maneuvers including a "Walton GRAT" and a "Jackie O. Trust." The article reports that:
"Only" $14 billion? That's a lot of money to the people who paid the taxes. And it's a framing game: compare $14 billion to $1.2 trillion and it looks small. But compare it to some other number, like, say, the $14.6 billion that was the entire revenue of the federal government in 1942, and it looks large.
The article says:
The notion that Mr. Buffett is somehow unlike the Waltons and doesn't want to leave his children anything is just totally bogus — so far from the truth that it's hard not to attribute it to the stereotypical view on the left and in much of the press that Walmart is somehow evil because it pays low wages and is non-union, while Warren Buffett is some kind of hero because he advocates for higher taxes and pals around with Barack Obama. As the New York Sun reported back in 2006, when Mr. Buffett announced his charitable intentions:
Mr. Buffett's son Howard is a director of Berkshire Hathaway and of Coca-Cola, according to the bio posted at the Howard G. Buffett Foundation. NPR reported that "his father gave him money to run his foundation — about $2 billion so far."
I don't think there's anything wrong with the Waltons leaving company stock to their children or grandchildren, or with Warren Buffett leaving company stock to a foundation his son controls. But the idea, conveyed by the Bloomberg article, that it is somehow vastly morally superior to leave an heir $2 billion in a foundation the heir controls, as opposed to putting the stock in a trust that the heir controls, is ridiculous. Walmart, by providing jobs and low-priced merchandise, probably does more good than the Buffett Foundation does.
The Bloomberg article does not explore how much money lawyers and accountants make for helping clients with these estate-tax avoidance measures, nor does it really get into the question of why not abolish the estate tax altogether if people are just going to figure out ways around it.
The whole article is a frustrating read, because while it raises some newsworthy issues about these estate-tax avoidance maneuvers, the set-up of the Waltons as the villains and the Buffett-Gates duo as the heros is so transparently bogus.
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