Warren Buffett: big government capitalist

Murray Sabrin

Last week, Warren Buffett, the second richest American with a net worth of more than $50 billion, came to Washington D.C. and testified in Congress. He told the Senate Finance Committee that the estate tax is needed “to prevent our democracy from becoming a dynastic plutocracy.” Buffett is adamantly opposed to inherited wealth. That’s why his children will receive about one percent of his estate on his passing and the rest will go to charity.

In short, Buffett’s estate could be worth billions more if he lives to a ripe old age and it will pay virtually no estate taxes, yet he wants the estates of small business owners, farmers and successful individuals to pony up billions to Uncle Sam upon their deaths.

Buffett’s personal social views or for that matter anyone else’s should not be the basis for public policy. If the Oracle of Omaha does not want to leave his estate to his children, grandchildren, etc., that is his prerogative.

As for the rest of us, in a free society adults should have the absolute right to give away their property upon their passing to their children, relatives, friends, colleagues, pets, charities, etc., and the federal government should not confiscate any portion of a person’s lifetime accumulation of wealth upon death. Why? Death, as one senator remarked at the Senate Finance Committee hearing, should not be a taxable event.

In a free society, the government is created to protect the people’s rights not confiscate their property. That was the promise of the American Revolution. The colonists seceded from the British Empire to form a nation based on liberty not entitlement, nor was government supposed to redistribute income and wealth. That was the promise of the Founders. Instead, the ideas of big government have taken root in America for the past 100 years and are embraced by capitalists as well as the intelligentsia, journalists and individuals across the political spectrum.

Warren Buffett, the son of the libertarian Republican congressman Howard Buffett, obviously did not learn from his late father that the government should be limited to a few authorized activities enumerated in the Constitution. Instead, Warren Buffett, capitalist par excellence, supports Hillary Clinton for president. If Hillary is elected president, the American people will have been governed by a Bush, a Clinton, a Bush and then a Clinton. What kind of democracy is this? Two families possibly occupying the White House for 28 years if Hillary is elected in 2008 and serves two terms.

If Buffett is so concerned about “dynasties” in America, he should renounce his support of Hillary and embrace the only candidate in the race who is his father’s intellectual heir, Rep. Ron Paul of Texas.

Warren Buffett is a brilliant investor and from all reports a straight shooter. When it comes to public policy, Buffett should reread his father’s views on the welfare-warfare state. He should conclude that government is best that governs least. And that means scrapping the estate tax, the income tax and downsizing the federal government, especially the overseas military bases that have nothing to do with our national security.

Murray Sabrin, Ph.D., is Professor of Finance in the Anisfield School of Business, Ramapo College of New Jersey, where he is Executive Director of the Center for Business and Public Policy