Buffett likes the estate tax, but like almost all billionaires, he won’t be paying it

BECKY HURRY UP: You said earlier that this is not a tax reform bill. Tax cuts.

WARREN BUFFETT: Tax reduction.

BECKY HURRY UP: What do you think about it?

WARREN BUFFETT: Well, a—I don’t think I need a tax cut.

But – for example, the current proposal eliminates the estate tax. And it’s not a death tax. There will be 2.6 million deaths this year in the United States. And there will be tax returns for 5,000 people – tax-paying plots.

So if you start going to a funeral every month, it will take an average of 40 years before you get to the estate tax liability. A very bad term.

The truth is that if they pass the bill – which they are talking about – I would leave 75 billion dollars to a bunch of children, and grandchildren, and great-grandchildren – and if we leave 35 of them – they will each have a few billion dollars. They can put it at 5%, have a hundred million.

I mean, is that a good way to allocate resources in the United States? Because that’s what you’re doing — with the tax code, you’re affecting the allocation of resources.

So if they were lucky enough to come out of the right womb, they had the right name, Buffett, they could live there and build themselves tombs like the Egyptians – the Pharaohs never dreamed.

They could—they could—they could do anything. And – and capitalism is about resource allocation wisely.

Now, some people say, “Well, you don’t need to worry about that because they’ll beat you all.”

But if (LAUGHTER) they beat you all, that means – you know, they’ve done some things with valuable resources. And that – that’s wrong with capitalism. I don’t think they are suitable for children. I’m sure – I don’t think it’s good for a society where there’s so much – inequality – to begin with.

And-so-I’d-I think that’s a bad mistake, for example.

BECKY HURRY UP: Well — let’s play devil’s advocate here.

WARREN BUFFETT: Of course.

BECKY HURRY UP: He has three children with foundations run by each. Do you think they would question that money better than the federal government?

WARREN BUFFETT: I—I do. But I – I – I don’t think that stopping children, grandchildren – let’s say they died at the age of 20. I don’t think they will be the same people as they are. I didn’t—I didn’t promote that foundation until they were in their 40s and—and I saw what they had done with their lives—and—and they had a chance to live a long time, going to public schools, living like other people in Omaha.

But I – I’m just thinking that – I don’t think we should have our Olympic team 20 years from now be the oldest sons of the Olympic team yet. And-

BECKY HURRY UP: So it is dynastic –

WARREN BUFFETT: Dynastic –

BECKY HURRY UP: -the impact of money.

WARREN BUFFETT: I don’t think – I don’t think – a powerful system with huge wealth – and remember that the rich are richer now than they were 25 years ago. We are talking about 400 now with 2.4 billion compared to 90 billion – 25 times more money.

So – you are sprinkled around – you have these children and grandchildren – that with those 400 they can have two – 2.4 trillion is transferred to them.

That’s a lot of resources in this country with a $20 billion G – not even a 20 – trillion dollar G – GDP.

I think – I think it’s completely against what this country is built on, what this country stands for.

And if those 5,000 people can’t spend 20 or 25 billion, they have a lot left over. Believe me.

And of course, it can be bad for philanthropy. I mean – people would choose – a certain number of people would choose to set up their children – you know, billions and billions of dollars rather than – rather than go to helping people.

But I don’t think that’s the main reason. But I think that would be a byproduct.