Buffett loves his kids, right?

I would put "virtual" in quotes myself. This is why I stated they could get a loan to pay for it. Virtual implies that the gain is not real. It is most certainly real, but it has not been realized. We are talking about a 13.5% tax. Regardless it isn't the difference between this operation staying in the family or leaving it. If the inheritors cannot finance $500,000 of a $3.7 million inheretence, I'm sorry. Better yet, have them deed it over to me, and I will figure it out.>

Here in Atlanta there is a well-known case of the estate taxing doing harm (Hyde Farm).

In the 1800's the Hyde family settled along the Chattahoochee River outside the city on 95 acres. The family has always lived very modestly, but the land is worth a fortune (developers are chomping at the bit). The most recent owner (Hyde family member) died and the tax bill is astronomical. There is an effort to preserve the land, but according to the law these relatively poor folks owe the IRS many, many millions of dollars.

Seoncd statement:
Well, I'm philosophical opposed to having to take out a 30 year mortgage to pay the tax bill for your dead parents' homestead.

Next time just be honest. $3.7 million invested conservately should return at least 7% a year. That is about $259,000/year. If the farm can do an ROA of 7%, they should have it paid off in 5 years without issue. I guess one man's homestead is another man's estate.>

Seldom if ever are estates who wish to continue operating the family business subject to estate tax. The business merely transfers ownership to the next generation during lifetime of the older generation taking 60%+ discounts on the FMV (Fair Market Value) of the sliver gifts transferred so that at date of death the origninal owner possesses less than a 50% ownership. Thus minority and marketability discounts are liberally granted relieving the business of any tax. Any operating entity wishing to remain operational whose owners pay estate tax should sue their financial planners. The notion that operating entities have to pay estate tax is ludicrious.>

There is nothing confiscatory about 11% tax rates. $500,000 is not a huge mortgage on a $3.7 million dollar estate. You can argue the morality if you wish, but your rhetoric is just plain sloppy.>

Apparently you don't understand the difference between average and marginal tax rates. 46% is the marginal rate that applies after the $2 million exemption. So, it applies to estates valued at anything more than $2 million, not $200 million. You probably understand that, but are intentional confusing the issue.

But, since you bring up average rates, isn't ironic that Buffet's average tax for his estate - given his tax exempt donation - will likely be much less than lots of far less rich people?

Don't you see the entire estate tax system is silly? Most aren't impacted, the super-rich avoid most of it and it's the unlucky few who get hammered. Plus, it doesn't prevent dynastic wealth or raise lots of revenue for the government. And, it diverts resources to tax avoidance and not more productive pursuits.

Tell me again why you support it.>