Forbes has a quote from Eli Broad, who the magazine says has wealth of $5.8 billion, on Warren Buffett's call for higher taxes on the "super-rich." Says Mr. Broad: "Those of us who have gained great success have an obligation to pay more taxes. We've been coddled long enough and have tax breaks that 99.9% of the public don't have, and it's not fair."
The magazine doesn't follow up by asking Mr. Broad why he has chosen to organize his affairs by placing about $1.5 billion of his assets into the non-profit, tax-exempt Eli and Edythe Broad Foundation, out of which Mr. Broad, according to the organization's 2009 tax return, paid himself a salary of $60,000 a year and a $4,726 contribution to his employee benefit plan for 30 hours a week of work. Another $800 million or so of Mr. Broad's assets have been placed into another non-profit, tax-exempt entity, the Broad Art Foundation.
Eli Broad's son Gary has his own non-profit, the Gary Broad Foundation, whose tax records show that it received donations of shares in KB Home. The "B" in KB Home is for Eli Broad, who co-founded it. By donating appreciated stock to a foundation, the donor reaps the full value of the tax deduction without having to pay capital gains tax on the appreciation. I'm all for charitable giving, but if Mr. Broad doesn't think these tax breaks are "fair," well, no one forced him to set up all these foundations to take advantage of them. He could easily have structured his affairs in a way that allowed him to pay more taxes, if he thought that Washington politicians were better allocators of capital than him or his son.